Data® Centers A 2011 SUPPLEMENT TO NJBIZ

an overview of the industry in new jersey

see what a modern data center looks like, inside and out

Finding the right location takes advance planning O to data center in 90 days For more information visit: io.com/modular letter from the publisher

The ever-emerging digital world and help you sort through what basic questions to ask as you work is creating all sorts of new opportunities and through your data-center needs. It also answers why New Jersey has challenges for businesses, large and small. From been specially positioned to handle these challenges. stock traders and health care providers adapt- The potential for growth in the data-center industry remains great ing to new regulations to retailers tapping the because the demands of individual companies keep evolving. And potential of the Internet, companies need to the industry has been adapting with that in mind. Systems are be- find ways to store and protect important busi- ing created that can help customers solve problems of today, while ness and customer data. planning for future data needs years from now. That means the data-center industry is flour- We expect that this overview will help you as you tackle the deci- ishing at a time of tough economic conditions sions you will need to make to tap into new and exciting opportu- worldwide. Service companies in the New Jersey nities that the new digital world offers. and the greater-New Jersey region are avail- able to help customers sort through their best options, and real estate companies have adapted to the special needs ofMountain data centers Development Corp. would like to thank to find just the right property for a customer. its friends at M&T Bank for financing With that in mind, NJBIZ pulled together this package of articles100 Delawanna Avenue Tom F. Curtin and guest columns that gives an overview of these trends in New Clifton, New Jersey

Jersey. This supplement will help you understand the overall trends Mountain Development Corp. would like to thank its friends at M&T Bank for financing 100 Delawanna Avenue Clifton, New Jersey

Mountain MountainDevelopment Development Corp. would Corp. like would to thank like to thank MountainMountain MountainDevelopment Development Development Corp.its Corp. friends would wouldCorp.its at like friendsM&T wouldlike to thankBank to atlike thank M&T for to financing thankBank for financing its friendsits friendsits at friends M&T at M&T Bank at Bank100 M&T for for financingDelawannaBank financing100 for financingDelawanna Avenue Avenue 100100 Delawanna Delawanna100 Delawanna AvenueClifton, Avenue Avenue Clifton,New Jersey New Jersey Clifton,Clifton, Clifton,New New Jersey NewJersey Jersey

2011 DATA CENTERS NJBIZ 3 ®

Mailing Address 220 Davidson Avenue, Suite 302 table of Contents Somerset, NJ 08873 (732) 246-7677 Publisher Thomas F. Curtin Advertising Director of Sales Mark Cialdella account executive Susan Alexander Design Design Manager Darren Phillips Senior Designer Sara Siano Publication Designer Kevin T. Paccione Editorial Editor Tom Barstow COPY Editor Gabriella Schrier CONTRIBUTORS Sean Brady Josh Rabina Richard Dolan Published by Journal Publications Inc. CEO David A. Schankweiler President Lawrence M. Kluger COVER DESIGN BY KEVIN T. PACCIONE

“NYI has been an invaluable technology partner. Their flexibility and time-to-market made all the difference at a moment when we needed a customized, business-critical solution.” - Tim Norris, Director, Information Systems, Alliance Life Sciences

COLOCATION. MANAGED HOSTING. BUSINESS CONTINUITY SOLUTIONS. 800.288.7387 / www.nyi.net / new york / los angeles / bridgewater, nj

4 NJBIZ DATA CENTERS 2011

b y Sean Brady

Data center use and design are going There are five different types of third-party providers—wholesale, container- through major changes, and enterprise users have ized wholesale, co-location (colo), managed services and Cloud. New Jersey’s more options from third-party providers than 5 market is competitive because of supply, and co-location companies compete years ago. Then, the typical decision was leasing or with managed services and wholesalers. The market is fluid, with providers buying a building and “build your own.” The only constantly changing services and trying to offer more and compete for new major variations were height of the raised floor and tenants in the market. There are limited service standards and uniformity be- type of cooling system. tween the providers. This is why a user needs to constantly test the market. Today, more power, cooling, fiber and water are re- The only industry standard is SAS 70, but as merely an audit of controls and quired, and data centers are more complex because processes does not truly address services provided to end-users. more critical issues and components are required for The need to access information continues to drive changes in data centers, a Tier 2, 3 or 4 center, making it more challenging to pressuring companies to look at their own centers and make them more secure. find qualified properties. The most common level of center design today for Companies also need centers to operate more cost-effectively, process informa- enterprise or third-party providers is Tier 2+ or Tier 3+. (Grading, ranging tion faster, store more information, and be more reliable. Operating a center from one to four, focuses on design, resiliency and redundancy.) can be costly, but with the economic downturn, IT spending at most compa- Tier 1 and Tier 2 have non-redundant capacity components and a sin- nies was down significantly.A t the same time, with tremendous technological gle, non-redundant distribution path serving computer equipment. Tier change, a center or equipment 5-7 years old can be assumed to need upgrading. 3 has concurrently maintainable mechanical and electrical systems with These pressures are causing the data center design to evolve quickly, and one of redundant capacity and multiple independent distribution paths servicing the newer concepts getting traction today is the container operators who are computers. Tier 4 is a fault-tolerant center with multiple independent, guaranteeing very low power usage effectiveness, or PUE. physically isolated systems providing redundant capacity components and IT spending is up 15 percent for the first half of the year, fostering data center multiple distribution paths serving computer equipment. All equipment growth, but IT departments are being asked to produce more with less. Most IT direc- has independent equipment back-up and a second power line to a second tors are investigating lowering operating costs, creating pent-up demand for upgrades. substation, so the center will never go down. Third-party options offer an alternative to building your own data center. New Jersey markets offer every third-party data center option available — Third-party providers also offer short-term solutions that never existed. New legacy data centers and properties appropriate for conversion. One example is center designs, equipment advancements and more powerful servers continue Brookfield Real Estate’s Convergence, a 650,000-square-foot campus at 115 to fuel center growth,, with financial services and healthcare leading the way. South Jefferson Road in Whippany. With heavy power, uninterruptible power Within Metro New York, the biggest growth is in New Jersey. Midtown/ supply, multiple generators, connectivity and full-site security, it is one of the Downtown Manhattan have 5.7 million square feet; Long Island approximately top mission-critical facilities available today in New Jersey. 1.3 million square feet; Westchester and Fairfield counties 754,000 square feet; and Rockland County/Northern New Jersey 15.2 million square feet. Many small to mid-size companies need or want their data center in their headquarters or nearby. Companies in Manhattan have limited alternatives — Sabey Data Centers is redeveloping 375 Pearl Street into the only special-pur- pose data center in Manhattan. In Westchester/Fairfield andL ong Island, there are few co-location or wholesale providers because of the limited access to the building, power and fiber. In New Jersey there are several providers, making it challenging for enterprise users considering the options. Limited supply else- where has helped the New Jersey market expand. The New Jersey colo/wholesale market is mature, with two large concentra- tions of data centers. One combines Bergen County, Meadowlands, Hudson waterfront, and Newark with 2.7 million square feet of space, encompassing 21 properties controlled by 13 companies. The vacancy factor is13.6% not includ- ing the future build of 500,000 square feet by Equinix in Secaucus. This region is predominantly a colo/managed services and newly expand- A row of servers is seen here at the Brookfield Real Estate’s Convergence at 115 South Jefferson Road in ing Cloud market, healthy with a price for power from $160-355 per kW per Whippany. Data centers are kept in pristine condition as part of the mission to protect critical data. Continued on page 10

6 NJBIZ DATA CENTERS 2011 When it comes to data centers, why New Jersey?

by Tom Barstow

First came the dot.com boom in the 1990s. The optimal distance of a data center from the point of a financial Then came the Sept. 11, 2001 terrorist attacks, followed by new fed- trade is about 25 to 30 miles, Hipschman and other experts said. The eral regulations of financial companies. NYSE Euornext has its data center in Mahwah, for example, and many And now, as all businesses adjust to the new Internet technologies of the banks and financial services companies have shifted centers from and new customers and performance demands brought on by the Web, across Manhattan and into the Garden State. those industries are driving new demand for data centers in New Jersey, Terence Deneny, vice president of Structure Tone Mission Critical, agreed a trend that will continue long into the future, observers noted. that the SEC regulations that require fast movement of financial data pushed An exact total of data centers is difficult to come by, largely be- demand in recent years and will continue to do so. Clients need proximity cause of security concerns of users. CB Richard Ellis tracks 40 data to trades and customers, but they also require being a safe distance across the centers that each have more than 100,000 square feet of space in water from Wall Street, in case another disaster hits Manhattan. Long Island New Jersey. The company doesn’t track the smaller centers, which isn’t as attractive because it is difficult to get anywhere quickly, and the island some observers said are numerous. is in the path of Atlantic hurricanes, as well as other issues.

The more points you have around the world, you can get access that much faster.

-Richard Dolan, director or marketing with Datapipe, which has its East Coast corporate offices in Jersey City.

What is clear is this: With “And once you are there, where do you go?” Deneny said, pointing the speed of information out that Long Island is, well, an island. that needs to follow mod- There is more room in New Jersey, he said. ern stock trades measured Phillip Koblence, vice president of operations for New York Inter- in fractions of a second, net Company or NYI, has been involved in building data centers in northern New Jersey has Manhattan, where the perfect space at a good cost gets increasingly become the place to site difficult to find.A nything from low ceiling height to security concerns the warehouses of com- can quickly derail a project . puters and servers, said Jeff NYI has a new venture in Bridgewater, New Jersey, with a 40,000 Hipschman, senior manag- square foot center that complements a facility in Manhattan, ing director of CB Richard Koblence said.

Terence Deneny Ellis in Saddle Brook. Continued on page 8

2011 DATA CENTERS NJBIZ 7 Continued from page 7 How data centers are rated Bridgewater is a hot area for pharmaceutical companies, and the NYI data center has been attractive to smaller companies that have complex The Tier Classification System aids stakeholders in evaluating whether a data center can data and security needs that must be resolved so they can serve their effectively meet its requirements. Data centers are rated on a four-tier system, with Tier larger customers, he said. I being the least complex and Tier IV being the most complex, according to the Uptime Pent-up demand and speed Institute, which describes itself as an “unbiased and third-party research, education, and Several other trends keep pushing demand and supply. consulting organization focused on improving data center performance and efficiency.” In the 10 years since Sept. 11, some companies waited until current For more information about the institute, go to http://uptimeinstitute.org. leases expired before looking to upgrade IT operations, and some of Here is a look at the basics of the four tiers, according to the Uptime Institute. that decision-making is driving current demand, Deneny said. In the Tier I: Non-Redundant -- “Dedicated Data Center Infrastructure Beyond Office Setting” meantime, their technology needs have changed. • Meets the data owner’s or operator’s desire for dedicated site infrastructure to support In addition to the new financial regulations, rules in other industries, such information technology (IT) systems. as health care, continue to evolve. In other words, each industry -- large or • Infrastructure provides an improved environment compared to an office setting and small -- is having its own issues driving the need to store and protect data. includes a dedicated space for IT systems; an uninterruptible power supply (UPS) to filter That means there is a growing demand for smaller users of data centers, power spikes, sags, and momentary outages. said Josh Rabina, founder and co-president of Sentinel Data Centers whose • Dedicated cooling equipment won’t get shut down at the end of normal office hours. presence in New Jersey includes a data center in Somerset. • An engine generator protects IT functions from extended power outages. A modern customer’s motives for looking at data centers could Examples of industries that will benefit from this level: real estate agencies; the hospital- be as simple as they have outgrown the space set aside for IT and ity industry; and business services such as lawyers, accountants, etc. they don’t have enough power, cooling or even ceiling height to Tier II: Basic Redundant -- “Power and Cooling Systems Have Redundant Capacity upgrade, Rabina said. Centers that accommodate multiple tenants Components” can solve those problems. • Infrastructure includes redundant critical power and cooling components to provide an Speed and security increased margin of safety against IT process disruptions that would result from site So while companies needing the services of data centers can range infrastructure equipment failures. from small service companies to the largest businesses in the country, • The redundant components typically are power and cooling equipment such as extra UPS they all demand the same thing. modules, chillers or pumps, and engine generators. This type of equipment can experience Speed. failures due to manufacturing defects, installation or operation errors, or, over time, worn- Global companies might have a headquarters in Asia but numer- out equipment. ous customers in Europe and the United States. To serve all customers Examples of industries that select Tier II data centers: They would include institutional equally well and equally fast, that might mean building data centers and educational organizations because there is no meaningful impact or disruption from around the world, said Richard Dolan, director or marketing with Dat- data center failure. apipe, which has its East Coast corporate offices in New Jersey. Tier III: Concurrently Maintainable -- “No Shutdowns for Equipment Replacement and “They will need an additional presence,” he said. “The more points Maintenance” you have around the world, you can get access that much faster.” • Tier III site infrastructure adds the capability of Concurrent Maintenance to Tier II solutions. Because of Internet payments and transactions, businesses have more • As a result, a redundant delivery path for power and cooling is added to the redundant critical need for security than they once did. And most companies need back- components of Tier II so that each and every component needed to support the IT processing ups of sensitive data as an insurance policy, if they can’t operate should environment can be shut down and maintained without impact on the IT operation. their office system go down, Rabina said. Examples of entities that select Tier III centers: They typically have high-availability For many smaller companies, the days of housing servers on their requirements for ongoing business or have identified a significant cost of disruption from premises are gone, said Eric Shepcaro, CEO of New York-based Telx, a planned data center shutdown. Such organizations often support internal and external which operates data centers in New Jersey. The systems for purchasing clients all day, every day, such as product service centers and help desks. or processing orders or executing everyday business functions are more Tier IV: Fault Tolerant -- “Withstand a Single, Unplanned Event, e.g., Fire, Explosion, Leak” critical than ever. They need redundancies and backups, as well as help • This tier builds on Tier III, adding the concept of Fault Tolerance, which means that if/ in sorting out the best technology paths into the future, he said. when individual equipment failures or distribution path interruptions occur ,the effects of The state wouldn’t be in a position to tap that growing demand if it the events are stopped short of the IT operations. didn’t have abundant fiber or power. Examples of organizations that have this need: They are ones that would experience a profound In the past 10 years, the cost of fiber lines has gone down, allowing disruption for any power center shutdown. That would include companies in a highly competitive companies to consider upgrades that might have been too costly in the or regulated market, such as electronic market transactions or financial settlement processes. past and to provide backups at centers off-site, Rabina said. Power is a critical element in the mix, and it isn’t getting cheaper. But a bigger concern than cost is the availability of adequate amounts of SOURCE: Uptime Institute power to cool down and operate the 24/7 centers.

8 NJBIZ DATA CENTERS 2011 Will Steffens with PSE&G noted that the data centers come in “Modular data center solutions are the future – and happening today,” all sizes, including smaller office buildings where the data of a few Michelle Bailey, research vice president of International Data Corp., said companies might be stored. No matter what, he said, they all require in a statement released by i/o. “Adopting a modular platform means abundant power and fiber. companies can deploy a data center when they need it – not months or He works with a variety of users to make sure those needs are years later – with a pay-as-you-grow path to guide future expansion.” met. But generally speaking, he said, companies might find retrofit- Bailey said that the modular model makes sense for a lot of compa- ting an existing space easier to get up and running quickly because nies because it is difficult to know future needs.M odular systems allow power and fiber lines already are in place. And, in that sense, New some components to be updated without having to change an entire Jersey offers a lot more options for developers and service opera- data center configuration. The bottom line, said Anthony J. D’Ambrosi, tors looking to site a data center than Long Island or Connecticut, chief sales and marketing officer at i/o, is that the new model allows clients to where options are fewer, observers said. buy capacity when they need it, saving on up-front costs, while not paying for Rich Miller, founder and editor of Data Center Knowledge, a excess capacity when users don’t need it yet. website that tracks and reports on industry trends, said power is so important that it is critical that the utilities stay proactive for the industry to thrive in New Jersey. “PSE&G absolutely is savvy,” Miller said. “They understand the big industries, and they understand their needs.” In the meantime, the market continues to adapt to new innovations. Arizona-based i/o, which is operating an 830,000-square-foot data center in a former New York Times complex in Edison, is de- veloping hardware and software models that it calls its “Data Center 2.0 model.” The company says that data centers are delivered as hardware and software using modular platforms that allow orga- nizations to start small, only pay for what they use and grow as New York-based Telx has operations in New Jersey, including this center in Clifton. Growth in New Jersey market needed without disruption to existing operations. is being driven partly by companies that once housed data onsite and now need off-site alternatives.

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2011 DATA CENTERS NJBIZ 9 Continued from page 6 centers, because it improves service and provides a competitive edge. month on the Waterfront and $210-500 per kW in the Meadowlands. Whole- Financial services are the biggest group leasing space from colo and whole- sale prices range from $210-230 per kW for the average size user. sale providers in New Jersey, having leased or purchased over 3.5 million In general, New Jersey is often the choice because of the cost and avail- square feet over the past three years. It is estimated that 1.7 million square ability of power, access to multiple fiber providers, available properties, feet will be added by the end of 2011. labor, and transportation. PSE&G and Orange & Rockland Utilities have Several recent deals substantiate the strength of the New Jersey market. led the way for power demand, upgrading their systems and expanding I/O Data Center, mentioned earlier, leased 830,000 square feet in the high-voltage 26 and 69 kV lines. Power companies charge a lower rate to New York Times building in Edison; Equinix purchased 500,000 square high-volume users, helping New Jersey look more attractive. feet in Secaucus; Savvis leased 76,000 square feet in Piscataway; and several The second concentration is from Edison to Bridgewater in Central New other users are looking for space now. Jersey, with nearly two million square feet. This area has nine co-location com- As the market evolves, the slowdown in IT spending in 2008 and lack of panies in approximately 750,000 square feet and three wholesale operators spending in 2009-2010 has created the pent-up demand now unfolding. controlling 1,187,000 square feet. The vacancy factor is 16 percent, not includ- News on WikiLeaks distributing corporate information, Google, Rack- ing the 830,000-square-foot I/O data center leased several months back and space and Equinix outages, PlayStation, CIA, Google and the AT&T se- just coming on line. The cost of power is lower in this market because there is curity breach has increased concern, causing corporations to seek better less demand and more competition because of the vacancy. security and redundancy.

Here is a look at the square-footage estimates of data centers in the region.

Westchester and Fairfield County 754,000

Long Island 1,300,000

N.Y. (Midtown and Downtown) 5,700,000

N.J. and Rockland County 15,200,000

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000

Source: Cushman & Wakefield

The cost of power in the overall market is less expensive because some land- The bottom line: Tier 2 or 3 co-location data centers provide an important lords draw PSE&G power from 69kV service, which is 4-6% less expensive option—they are more reliable and secure than most corporate centers. These than 13.2 kV. The price per kW ranges from $330-350 per kW per month for third-party operations also provide a solution for enterprise users with delayed colo to $130-210 per kW for wholesale space in the southern market. IT upgrades that need a quick solution. Co-location facilities are ready for oc- Availability of fiber providers is also critical, and New Jersey fiber networks cupancy today and will not take 12-18 months to build or to upgrade current and sonic rings are the most plentiful of any of the suburban markets. As for enterprise data centers. available properties and labor, New Jersey has the highest concentration of en- Finally, services from co-location companies have expanded, pricing is gineers within the region and a high concentration of available properties with more competitive and most of these companies are offering Cloud. All of immediate access to high-voltage power, fiber, and sonic rings. these reasons are why the New Jersey co-location/wholesale market is Indeed, seven of the 10 largest U.S. banks and eight of 10 of the world’s growing stronger. The market saw 1,480,000 square feet of co-location/ largest investment banks have major data centers in New Jersey, helping wholesale data center space leased in 2008, 1,065,000 square feet in 2009 the decision process within corporate America. Proximity to Manhattan and 1,103,500 square feet in 2010. also attracts wholesale, colo, managed services, containerized data centers We continue to see growth from co-location/managed services, the strongest and Cloud service providers. part of the market. Demand for Cloud shows strong interest, with more third- Financial firms have the resources to try new technology to move trades party providers adding this as a service line. Wholesale, however, isn’t seeing faster, create a more secure network, be more reliable, or provide more the leasing activity we expected over the past 12-18 months. The container- cost-effective solutions. These users are early adapters to change in data ized colo/wholesale model will likely gain more acceptance over the next

10 NJBIZ DATA CENTERS 2011 two years. Containerized data centers are being mass-produced, lowering the cost; being designed with very low PUE, quick speed to market; and modulars or containers can be customized. We think this solution will be one of the faster segments of the market over the next three to five years as it is projected. We believe 2011 will continue to improve and exceed 2010 leasing activity. Change in data center design, technology ad- vancements, and acceptance of third-party providers can help corporations lower upfront and long-term costs, and that will continue to fuel the explosive growth of third-party providers. That growth has tamed the skeptics and will provide increased momentum for the paradigm shift to pick up significant speed for the next two to four years.

Sean Brady is Senior Director and Co-Founder of the International Data

Center Advisory Group (DCAG) for Cushman & Wakefield of New Jer- sey, Inc. East Rutherford. With partner Jeffrey Prezant, he has specialized in data centers and collocation operation since 1995, and completed the first colocation facility on the East Coast. The DCAG, which has 25 transaction experts in the U.S. and five overseas, manages more than

20 million square feet of mission-critical space. A top data center ap- praiser complements the group’s vast experiences to create an expert team for projects worldwide. The group’s international platform assists clients seeking greenfield sites, free-standing legacy or potential buildings to be converted to data centers, colo wholesale colo, and helps secure, Brookfield Real Estate’s Convergence, a 650,000-square-foot campus at 115 South Jefferson Road in Whippany. Data centers often blend in with modern office buildings, allowing them to fit in with established industrial and office parks. rack space and provides project management.

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2011 DATA CENTERS NJBIZ 11 b y Josh Rabina

Like traditional commercial real estate, multi-tenant models that enable easier pathways for growth or contraction. data center real estate can be organized into different PLAYERS: Examples of recent single-user developments in New Jersey sub-categories, each of which is optimized for differ- include NYSE Euronext’s construction in 2010 of a 400,000-square-foot ent types of end-user requirements. facility in Mahwah and Credit Suisse’s currently ongoing construction of a Selecting between the various options for physi- 285,000-square-foot acility in Clifton. cal data center space is a critical long-term business Retail colocation: This option delivers the most flexibility of the available decision. Start by developing a comprehensive list of options in that customers can add single cabinets as needed and can typically your priorities with respect to quality, autonomy, cost sign very short-term contracts. For customers requiring managed IT services and flexibility and evaluating them against each of the (i.e. hardware, application or network support), retail colocation providers often models mentioned below to get a clearer picture of provide such services within their facilities. On a per unit basis, retail colloca- which option works best for your organization. tion tends to be substantially more expensive than wholesale collocation due to The three primary categories of data center space in today’s marketplace include: the overhead associated with managing and servicing multitudes of small users Single-User Facilities: facilities intended for use by a single end user ex- and is, therefore, typically most cost effective for users that are too small to be clusively, typically designed as standalone buildings or as sizeable areas within served by the wholesale market (approximately 1-20 server cabinets). larger corporate facilities. Operational responsibility at single-user facilities From an autonomy perspective, retail collocation customers control the con- ultimately resides with the owner-occupant. tents of their locking server cabinet or cage, but they have limited opportu- Retail Colocation: multi-tenant facilities operated by a service provider, nity to customize their providers’ facility designs, change-management policies designed to offer small units (typically single server cabinets or small cages) and or operating practices. From a quality perspective, substantial variability exists shared infrastructure to hundreds of customers within the same physical build- among the dozens of providers and engineering due diligence to assess the ing or leased premises. Operational responsibility at retail colocation facilities infrastructure supporting the “white space” is critical. ultimately resides predominantly with the service provider. PLAYERS: Major players offering retail collocation solutions in New Jersey Wholesale Colocation: multi-tenant facilities master planned for the provisioning of include Equinix, Telx, zColo, and Telehouse. large units (typically 2,000 to 40,000 square feet of computer room space) with some Wholesale colocation: These providers target users with greater scale than degree of dedicated infrastructure to a small number of customers within the same optimal for retail colocation, but insufficient scale to warrant construction of physical building. (While the market has come to use the term “wholesale” to describe a single user facility. From an autonomy perspective, wholesale users typically this sub-category of multi-tenant data center facilities, it is often a misnomer in that provision hard-wall demised premises with dedicated access control and some many, if not most, wholesale colocation tenants are large end users, not resellers.) degree of dedicated mechanical/electrical infrastructure. Operational responsibility at wholesale colocation facilities typically resides Wholesale providers typically staff 24x7x365 with specialized operations with some combination of a service provider and the end user itself. teams, but they also reserve space for tenants to staff personnel on site and can Each of the above categories has strengths and weaknesses across parameters optimize change-management procedures individually for each tenant. that all organizations must evaluate as they consider options for physical data Wholesale providers tend to offer only basic support services, but they often center space: quality, autonomy, cost and flexibility. partner with third parties to provide fully managed services if required. Here is a look at each option in more detail: With respect to total cost of ownership, wholesale colocation tends to pro- Single-user facilities: While these facilities enable the most control over vide a substantial (often 30-50 percent) discount to retail colocation on a per design and operations, they also require the greatest up-front investments of unit basis. However, it requires minimum space commitments (20-plus server capital and entail the highest levels of budget and timeline risk given typical cabinets), longer lease terms and higher tenant credit profiles. design and construction durations of 24 to 36 months. With respect to flexibility, wholesale colocation does not offer the ability to grow Due to dramatic economies of scale in data center construction and opera- by the single server cabinet as does retail colocation. However, it offers substantially tions, single-user facilities tend to provide attractive total cost of ownership more flexibility than single-user facilities in that wholesale providers often structure profiles for very large users (approximately 50,000 square feet of usable com- options to increase space or power density that can be exercised on relatively short puter room space or greater) and tend to compare unfavorably cost-wise to notice, enabling IT groups to better match facilities expenditures with demand. multi-tenant alternatives for moderate sized requirements. PLAYERS: Major players in the wholesale space in New Jersey include Senti- From a flexibility perspective, given the inherent mismatch between the ap- nel Data Centers, Digital Realty Trust, and DupontFabros Technologies. proximately 20 year useful lifespan of a data center and the typical IT planning

horizon of 2 to 5 years, it is difficult to appropriately size single user facilities, Josh Rabina is a founder and Co-President of Sentinel Data Centers, a leading developer and

often resulting in costs and complexities that can be substantially avoided in operator of enterprise-grade, wholesale data centers.

12 NJBIZ DATA CENTERS 2011 Complex components can complicate center development

by Tom Barstow

Data centers require complex pieces to pull together just right. and don’t clog local roads. While not labor-intensive beyond the initial And that means there must be close coordination among the devel- construction jobs, the jobs pay well and the workers are spread over oper, service provider, utility and municipality to find the perfect site. several shifts because of the 24/7 need to man them, Turbowitz said. And if quick access to the market is important, a lot of times, that means Proper zoning is important, he added, because the centers require working with a vacant industrial or warehouse building, where retrofit- routine maintenance of backup diesel generators, which can be noisy ting can be kept a minimum and a site already has abundant power and to neighbors if a complex isn’t planned well. Bridgewater officials have fiber capabilities. worked closely with the developers and tenants to make sure that such Phillip Koblence, vice president of operations for New York Internet code issues were addressed. Company or NYI, found just a site in Bridgewater, where the com- “They are kind of like large warehouses of data,” Turbowitz said. New pany was able to retrofit an older industrial building. That allowed rela- Jersey is known for its warehousing industry, so a lot of communities tively minimal upfront investment in infrastructure. The complex had will be familiar with the issues that could be faced with a large center, once housed a fastener manufacturer and a research and development he said. That also means that businesses invest for the long term.

The supply continues to be developed because the demand continues to be present.

-Jeff Hipschman, senior managing director of CB Richard Eillis.

facility, which meant there was plenty of power leading to the site, a “They are great in the fact that they aren’t going to put them in today core requirement for any data center, he said. and move them somewhere else tomorrow,” Turbowitz said. A converted site has other benefits, as well.L arge parking lots, which Over the summer, Mountain Development Corp. settled on a prop- might have served hundreds of manufacturing workers, can be reserved erty in Clifton, where it is converting a former chemical company at 2 for future expansion. Pekay Drive into a 212,000-square-foot data center, said Michael Seeve, For municipalities, such conversions are welcomed additions to a tax base. company president. “It really was a bonus for us to get that filled,” saidH oward Turbowitz, A number of factors go into finding a perfect site, Seeve said. They economic development officer for Bridgewater in Somerset County. include the following: adequate power and fiber; being above the flood “We would love to have more data centers. They are not easy to land, zone; a location strategic to the user; land properly zoned for the uses; especially in a town like Bridgewater that is built up.” and a secure site. Bridgewater currently has two data center complexes, he said, and Oftentimes, an old manufacturing site can serve as a good place for a they offer a good return for taxpayers. The centers don’t burden services Continued on page 14

2011 DATA CENTERS NJBIZ 13 A number of factors go into finding a perfect site for a data center, said Michael Seeve, president of Mountain Development Corp. They include the following: • adequate power and fiber; • land properly zoned • being above the flood zone; for the uses; • a location strategic to the user; • and a secure site.

Continued from page 13 There was talk in the industry over the summer about whether data center because much of that infrastructure already is there. too much data center space was being built too fast, said Rich Miller, “A million different issues can come into play … to make a center founder and editor of Data Center Knowledge, which tracks trends and work,” he said. news in the industry. Real estate companies with an expertise in the data center industry As the summer progressed, and leases were signed, industry observers bring backgrounds and knowledge in such tasks as site work, arranging were finding that what looked like a lot of available space was dwindling, financing for clients, finding the right location, and working with the he said. The industry adapted after the dot.com bust, when a lot of space local municipality and power company, Seeve and others said. Some was left empty, and developers learned not to build too much too quickly. might work with a service provider to offer tenants specific data center “The industry learned, and now the centers are built in phases,” he expertise or develop that expertise on their own. said. In addition, data center operators and developers purposely keep The different segments of the data center industry, such as single- some space available for tenants’ future growth, so they don’t worry if user facilities, retail colocation or wholesale colacation, all have different they have some extra space at any given time, he said. motivators for supply and demand, several observers pointed out. Jeff Hipschman, senior managing director of CB Richard Ellis, said With retail facilities, which have multiple tenants served by a service he doesn’t think the New Jersey market is saturated. provider, demand remains strong, said Eric Shepcaro, CEO of New “The supply continues to be developed because the demand contin- York-based Telx, which operates data centers in New Jersey. ues to be present,” Hipschman said. “We have not seen any slowdown,” Shepcaro said. Continued on page 16

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14 NJBIZ DATA CENTERS 2011

A space to talk tech

Continued from page 14 New York Internet Company’s data center in Bridgewater includes meeting space intended to create a Space can get gobbled up pretty quickly, because “the demand is place for the wider technology community to meet. there,” he added. The market is driven by the obvious factor -- location. Compared When New York Internet Company (NYI) created it’s data center in Bridge- to other parts of the country, New Jersey real estate is expensive, but water, it wanted to create a place that would encourage the development of not as expensive as Manhattan, Miller said. The companies that need a technology community. to be near New York City will look to New Jersey before Long Island “We wanted to make 999 Frontier a hub,” said Phillip Koblence, vice or Connecticut. And there is a lot of home-grown, New Jersey based president of operations for NYI. business demand for the centers, he said. So the company set aside space that could be used by the wider technol- State incentives ogy community for meetings and gatherings. Nationally, some states are seeing the potential that data centers can NYI, with its offices in Manhattan, had seen such communities develop offer local economies and tax bases, so they are starting to offer devel- informally in New York, where gatherings of like-minded people created opers incentives. their own social network, often meeting at favorite hangouts. Because demand has been so high in New Jersey, the market has been The meeting space in Bridgewater attempts to replicate that feeling of entirely demand driven, Miller said, adding that the state hasn’t had to community and shared interest, he said. get directly involved in helping to nudge the trends along. Howard Turbowitz, economic development officer for Bridgewater, said Shepcaro, of Telx, said there has been some effort to get the state the meeting space added a nice touch to the rejuvenated building. When more involved, with suggestions for incentive programs and other eco- special events are held at the center, the community benefits, he said. nomic development issues. The governor’s office and the newly created Choose New Jersey have started to show more interest lately, he said. -Tom Barstow “New Jersey has been a little behind,” he said. Spokespersons for the state Economic Development Authority and for Choose New Jersey said their organizations are aware of the trend and are encouraging development along with all other New Jersey businesses.

16 NJBIZ DATA CENTERS 2011 JERSEY CITY 10,000 sq ft space upgrade SANTA CLARA 2nd Data Center opened Q2-2011 RICHMOND On-going site development ATLANTA 130,000 sq ft added Q4-2010

LOCATIONS SQUARE FEET Anatomy of a data center

p h o t o s b y John Baer ­— PDM Pictures, Courtesy Structure Tone

Data centers have complex components that store valuable and sensitive information. So while the metaphor of “warehouses of data” will be used to describe them, they are not the images of an industrial warehouse with dusty shelves and oily back-up generators. Rather, they almost look hospital clean in the way they are structured and maintained. Here is a series of photos of a complex in central New Jersey run by Structure Tone. The exact location is confidential.

High density data racks are the heart of a data center.

On-site generators are required to support the infrastructure required to power data centers.

High density data centers require significant cooling, which can be air or water supplied. Above, a water supply infrastructure to support cooling is shown.

18 NJBIZ DATA CENTERS 2011 This building houses a highly complex, fully redundant, 476,000-square-foot enterprise data center and disaster recovery facility in central New Jersey.

Comprehensive utility yards, like the one pictured above, are often Data centers often include sophisticated perimeter and access security measures, such as the retina scanner constructed in conjunction with data centers to support the high shown above. energy demands of the facilities.

2011 DATA CENTERS NJBIZ 19 Power, effIciency and new customers defIne future

by Tom Barstow

Several developers and companies involved in the data organizations, such as the U.S. military, constantly seek ways to gener- center field mentioned several trends they see developing for the future, in- ate power for their facilities that do not use the main electrical grids. cluding an evolving customer base being driven by new business practices. Black outs and brown outs wouldn’t be as much trouble, if you had And everyone mentions the constant search for the most efficient your own power systems off the grid for when the grid goes down. power to maintain the centers at the lowest possible cost, as well as the And such innovations would help achieve another primary goal, which search for innovative ways to save on cooling and electricity costs. is ensuring that operations are that much more safe from cyber attacks Future power needs and terrorism. “I think availability of power is the biggie,” said Mountain Develop- Bowman said companies are always asking: what is my self-help ment Corp. President Michael Seeve. “Without that, there is nothing.” method for providing power and what are my options? Abundant power to a site is getting harder to come by, he said. That That also means that there is a new willingness for companies to situation will continue to make brown-field properties and old indus- move closer to energy sources, and where we put future energy sources trial sites attractive, because they already have those lines, Seeve said. will remain an important question, Bowman said.

I think availability of power is the biggie. Without that, there is nothing.

-Michael Seeve, president of Mountain Development Corp.

Ronald H. Bowman Jr. is Conservation now and the future executive vice president of Even as new power sources are developed, the industry continually Structure Tone Mission Criti- needs to look at ways to conserve energy. cal. Data centers use diesel Terence Deneny, vice president of Structure Tone Mission Critical, generators as back-up systems summed up the future of energy with several points along those lines. because they are so reliable -- Energy efficiency is important, because it drives costs lower, and cost tested for generations always is a concern. The goal for all data centers will be to develop “Diesel generators will centers that are built more efficiently and that operate and run more probably never go away,” efficiently. So there is a constant search for innovations. he said. Will Steffens with PSE&G pointed out that New Jersey power isn’t But the industry always is cheap but can compete on distribution costs compared to Manhattan

Ron Bowman looking for options, and large Continued on page 22

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www.net2ez.com For info, contact +1.888. 931.3444 or [email protected] Continued from page 20 The changes, at times, are driven by new regulations, such as prices. And, although power might be less expensive in other parts of those imposed on the financial services industry. Federal health care the country, northern New Jersey is where a lot of companies need to regulations are another example, re-shaping the way health care be and are not in a position to relocate simply because of power costs. providers view and need data. As health care records go from writ- Therefore, he added, industry leaders often talk about efficiency ten reports in an individual doctor’s’ office to electronically acces- and energy conservation as a critical issue. A new method to im- sible records, health care providers need to ensure the data is secure prove cooling, he pointed out as an example, is something that is and backed up. watched carefully. Such sophisticated handling of data is required in more and more “Energy conservation always is a key topic,” he said, because it is such industries, such as the legal field and manufacturing, said Koblence, of a large part of the operating expenses after a center is built. New York Internet Company. That might include methods to use outside air more efficiently in the Data centers, especially ones that offer back-office type services be- cooling of centers, while also using heat generated from data centers as yond the actual physical data center facility, can allow such companies an energy source, several people pointed out. to focus on their core competencies, without having to hire the tech On-site green energy, such as solar and wind, isn’t quite there yet to support and infrastructure to maintain all their data. act as a reliable backup to data centers and their high energy needs. The “Once you get to a certain tier, they almost all are the same,” he on-site diesel generators that run for three or more days before refuel- said of the physical data center building. “What can you offer be- ing will remain the primary backup for centers, Steffens said. yond those specs?” With New Jersey being a leader in solar energy, and with the fact that As they currently do, data center service companies will need to work there are a lot of flat roofs over industrial parks that house data cen- with these new clients on networking, administration, consulting, rack- ters, there could be promise in future applications for data centers, said ing and stacking issues and various other services, he said. Phillip Koblence, vice president of operations for New York Internet “How to get set up in the most optimal way,” Koblence said in sum- Company or NYI. ming up part of the role of the service company. “Industrywide, there is a push to increase efficiency,” he said. “...A nd, As Internet technology matures and the technology needs of all com- as green energy matures, it always will be something to look at.” panies evolve, they are going to need more sophisticated ways to keep Future customers up with customers’ demands, said Steffens with PSE&G. The data center industry started to fully develop during the dot.com Industries and businesses that once weren’t technology heavy are now era, and it accelerated with the Sept. 11, 2001 terrorist attacks that led tech heavy and that pattern isn’t going to change. the financial services industry to seek secure and redundant alternatives “All types of companies now require data infrastructure,” Steffens to handling sensitive data. said. “People need speed. And if you are going to serve this market Since then, just about every industry has had to develop new tech- (New Jersey), you need to have speed.” nologies to serve their customers. (Think Facebook and Twitter as mar- A wide range of data center customers will be coming from industries keting tools and the overall Internet use for retail operations and com- such as the media, pharmaceutical companies and health care providers munications). And as businesses adapt and grow tech needs, they drive that will need to develop complex plans for storing and protecting data the demand for data centers and the services they provide. -- needs that might not have existed just a few years ago. The potential for data centers as a home-grown New Jersey indus- try is vast, Steffens said. That already has been proven by the dozens of centers already operating in the state, he added. Growth, Steffens said, will be “significant.”

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© 2011 Cushman & Wakefi eld, Inc. All rights reserved. www.cushwake.com/casestudies Is the future now? -- Cloud computing

by Tom Barstow

Just about everyone has a different idea of what cloud comput- “The hybrid is really hot now,” said Rich Miller, founder and editor ing entails or what its potential is for the future, partly because the needs of Data Center Knowledge, a New Jersey-based company that reports of an individual company can be specific and varied at the same time. on and covers trends in the industry. The cloud metaphor exists in today’s operations, but the potential of the “You have the private to keep sensitive stuff, but you are looking for concepts involved could steer future data center trends, several experts said. savings in the public cloud,” he said. One elementary idea to understanding how cloud computing works The start-up example illustrates the basic concept. How would a would be to look at a fictional start-up with limited funds.I t doesn’t have a complex company with complex needs for computing, redundancies lot to invest in tech support or to buy the rights to various software applica- and security tap into this potential? tions for basic word processing or other tasks. “As a data center operator, that is exciting,” said Phillip Koblence, Through the Internet, the company conceivably could obtain a num- vice president of operations for New York Internet Company or NYI. ber of the tools, simply by knowing that a lot of those tools exist in the “More bang for the buck.” “cloud.” For example, an Internet connection can get you to Google, Cloud computing can allow companies to focus on their immediate which has email and document features. The documents can be shared tasks at hand -- the core competencies of their business or industry, with anyone else who has an Internet connection and that you give rather than IT issues. permission to access it. Then, when you close out of the document, it is “It will continue to get more efficient,” Koblence said. stored with Google in its data center in the “cloud.” Josh Rabina, founder and co-president of Sentinel Data Centers, said Document users do not need to know or really care where Google companies that can capture the demand for cloud services are tapping has housed its data center and servers. They just need to know that they a growing demand. can access documents anywhere with a laptop, tablet or smart phone and For some companies, they might find that data center service compa- the document is no longer “locked” on a desktop in some office. On nies can handle much or all of their IT needs, which would allow them the other hand, if you copy it to your desktop, the desktop serves as a to outsource their IT departments with the potential to greatly reduce redundant backup of a file, in case Google’s servers ever go down. operating costs. However, the company also might have a need to protect sensitive With cloud operations, such companies would no longer “own” their data that it needs to share among all its workers or customers. They servers, he said, but could trust that their IT needs are being met. would create a private cloud, which could be servers housed at a data Eric Shepcaro, CEO of New York based Telx, which also operates center. The private cloud would have the ease of use and IT savings of data centers in New Jersey, said his company works with clients to a public cloud but the security of knowing that the information isn’t facilitate the needs for a private cloud, with companies opting for less accessible by the entire Internet world. critical functions being used on the public cloud. A hybrid would take the best of both notions and cater those And, he added, the fact is that the public cloud can be safe, as well. services to the needs of a specific company.D ata center service com- For a closer look at the definitions on what encompasses the cloud, see “How to get your panies could fill that role. mind around the cloud” on page 27.

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The industry has come a long way in standardizing terms to describe and define focal point, rather than having to do so at hundreds or thousands of individual data centers and the various levels of service, several people pointed out. But desktops, as had been the case traditionally. In summary, a private cloud housed when it comes to the “cloud,” the concept continues to evolve. at a data center offers more control and security over sensitive information, while “With the term cloud, you will hear widely divergent (explanations),” said Josh allowing access for approved users. Some companies might have considered that Rabina, with Sentinel Data Centers. as an Intranet, but the private cloud would take fuller advantage of the benefits With that in mind, here are some concepts that are generally agreed upon. of new technologies housed in a data center. CLOUD/PUBLIC CLOUD: Some people would suggest that the cloud is a HYBRID CLOUD: This is where industry observers say there is a lot of future metaphor for the Internet. It’s where data lives somewhere out there -- across the potential. Data center service companies, in particular, are in a position to help Internet -- rather than on your hard drive. People can access information easily clients figure out what mix of private and public cloud computing is best for their and don’t need the technical hardware and software to obtain it, other than an business tasks and goals and what mix saves the most in overall IT costs. Internet connection. Businesses and people are learning how to tap this resource UTILITY MODEL: Some people also define cloud computing as a way to pay to save money on hardware and software applications, which reduces their reli- for computer services. They use the power company as a metaphor. People and ance on in-house IT services. businesses don’t have to buy turbines to create power. Instead, they pay a utility PRIVATE CLOUD: Think public cloud, as far as the advantages of having for the ability to just plug into the power source. Similarly, people don’t need to hardware and software applications that can be easily updated at one location. But buy expensive servers to house costly software. Instead, they might be willing to this time you know and care where those computers and servers are and want to pay for the ability to plug into -- or connect -- to the services they need through be assured all the information is secure. That is, companies often have information the Internet. that is too sensitive for them to comfortably put it out on the public Internet. -Tom Barstow There still is IT savings and the ease to expand and upgrade technologies at one

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2011 DATA CENTERS NJBIZ 27 Putting numbers to the data center trend

by Tom Barstow

The nature of the data center industry makes it difficult to know Rich Miller, founder and editor of Data Center Knowledge, keeps a exactly how many centers are in New Jersey. A lot of companies demand link to Data Center Map on his Web site. And he agreed that the Data secrecy as a security measure, and some operations are small enough to Center Map tool offers some insight but added that it wouldn’t be a stay off the radar of industry observers. complete accounting of all data centers in New Jersey. Jeff Hipschman, senior managing director for CB Richard Ellis in “People always are looking to put numbers to this, and it is very hard Saddle Brook, said his firm keeps track of the largest centers, which he to do,” he said. defined as 100,000 square feet or larger. The colocation data centers would include space leased by various Hipschman said there are about 40 data centers on that list, which tenants. Some single-user data centers are very secretive and companies is confidential. never reveal those locations, he explained.

People always are looking to put numbers to this, and it is very hard to do. There’s a whole chunk of the iceberg below the surface. -Rich Miller, founder and editor of Data Center Knowledge

The industry doesn’t have a formal trade group in New Jersey, and “There’s a whole chunk of the iceberg below the surface,” he said. the state Economic Development Authority doesn’t track specifics For example, he added, the government has about 2,000 data centers about the industry. spread nationwide but those locations are not revealed publicly. One place to find a colocation data center is through a mapping Some research companies track trends, including Tier1 Research, service called Data Center Map. In August, the mapping service listed which is a division of The 451 Group. Tier1 Research will charge 35 colocation data centers in New Jersey on its mapping tool found at clients for detailed information. However, Tier1 did provide this basic http://www.datacentermap.com/usa/new-jersey/. list of what it considered not quite 100 percent of the larger data cen- But people need to be careful about thinking in terms that such lists ters in New Jersey, said Simon Carruthers, a senior vice president of are precise, several observers said. operations with The 451 Group.

28 NJBIZ DATA CENTERS 2011 From Tier1 Research:

Locations Key 01 Piscataway 10 Edison 02 Secaucus 11 Weehawken 03 Newark 12 Parsippany 04 Totowa 13 Cedar Knolls

05 Clifton 14 Carlstadt 04 06 Jersey City 15 Belmar 07 Somerset 16 Bridgewater 08 North Bergen 17 Carteret 05 09 Bayonne 18 Branchburg 14 02 Company Location # 12 AT&T Piscataway, NJ 08855 01 13 AT&T Secaucus, NJ 07094 02 08 * Blue Hill Data Branchburg, NJ 08876 18 11 06 CenturyLink Newark, NJ 07102 03 18 Cervalis Totowa, NJ 07512 04 03 Colocation America Clifton, NJ 07014 05 09 Continuity Centers Jersey City, NJ 07307 06 17 Datapipe Somerset, NJ 08873 07 01 16 Datapipe Somerset, NJ 08873 07 Datapipe Somerset, NJ 08873 07 10 07 Digital Realty Trust North Bergen, NJ 07086 08 Digital Realty Trust Piscataway, NJ 08854 01 Digital Realty Trust Piscataway, NJ 08854 01 Equinix Newark, NJ 07102 03 Equinix North Bergen, NJ 07094 08 Equinix Secaucus, NJ 07094 02 Equinix North Bergen, NJ 07074 08 15 FiberMedia Jersey City, NJ 07310 06 FiberMedia Secaucus, NJ 07094 02 FiberNet Bayonne, NJ 07002 09 FiberNet Newark, NJ 07102 03 hqhost North Bergen, NJ 07047 08 i/o Datacenters Edison, NJ 08837 10 InterNAP Jersey City, NJ 07302 06 Interserver Secaucus, NJ 07094 02 Interserver Secaucus, NJ 07094 02 Level 3 Edison, NJ 08837 10 Level 3 Newark, NJ 07102 03 Level 3 Weehawken, NJ 07086 11 Natcoweb North Bergen, NJ 07047 08 Net Access Parsippany, NJ 07950 12 NetAccess Cedar Knolls, NJ 07927 13 NetAccess Parsippany, NJ 07950 12 New Jersey Colocation Secaucus, NJ 07094 02 New Jersey Colocation Secaucus, NJ 07094 02 Quality Technology Services Jersey City, NJ 07302 06 Savvis Jersey City, NJ 07302 06 Savvis Piscataway, NJ 08854 01 Savvis Weehawken, NJ 07086 11 Sentinel Datacenters Somerset, NJ 08873 07 SunGard Carlstadt, NJ 07072 14 SunGard Carlstadt, NJ 07072 14 SunGard Newark, NJ 07310 03 Tata Communications Belmar, NJ 07719 15 Telx Clifton, NJ 07014 05 Telx Weehawken, NJ 07086 11 The New York Internet Company Bridgewater, NJ 08807 16 TW Telecom Jersey City, NJ 07302 06 Verizon Business Carteret, NJ 07102 17 XO Communications Newark, NJ 07102 03 XO Communications Secaucus, NJ 07094 02 zColo Newark, NJ 07102 03 * NJBIZ research

2011 DATA CENTERS NJBIZ 29 Choosing a Data Center for Security and Compliance

b y Richard Dolan

These digital technology hubs are relied upon to make our busi- countants (AICPA), SAS 70 has long been recognized as a standard of compli- nesses run more efficiently and our personal lives easier.W ith an increasing ance when outsourcing the management of financial data. On June 15, 2011, amount of our confidential information traveling through these facilities, what SSAE16 went into effect, and data center providers are now seeing demand makes one data center different from the next? from clients requiring this certification. Creating a more stringent framework, What methods are taken to protect your data from being compromised? If SSAE16 supersedes SAS 70 and is centered on service organizations and the you process credit card transactions, are your clients safe? controls in place for maintaining data integrity in an outsourcing relationship. Three-Factor Security Access A Data Center Must Earn Your Trust Unlike the movies, where scanning the hand of an unconscious guard The amount of sensitive data transmitted over the Internet is not slowing instantly grants access to a highly secure facility, three-factor security requires down. We do our taxes, manage our investments, and pay our bills through measures beyond your physical assets to authenticate your identity. The three online applications. We have given up filing cabinets filled with personal infor- factors of authentication are referred to as “something you have, something mation in favor of digital storage. In addition, all of this data can be accessed you know, and something you are.” with mobile devices. Something You Have: When performing business online, there are risks involved in every aspect of Swiping an ID card for access is a familiar part of our lives. From EZ-Pass your data transmissions. While security is not meant to be convenient, it is an lanes for tolls, to entering your office, this is one of the most common forms absolute necessity. When choosing a data center to manage your infrastructure, of access control. Unfortunately, many proximity cards are easily duplicated by it is vital to consider the security measures discussed above. simply standing close enough to a device that captures information in the same

manner as the access panel. For this reason, some data centers use a smartcard Richard Dolan is director of marketing for Datapipe Inc. Datapipe is a global provider of

system that encrypts transmission data to provide a high level of security. mission-critical IT solutions with data center locations in the New York Metro are, Silicon Valley,

Something You Know: London, Hong Kong and Shanghai. PINs, passwords, your pet’s name, these things may not necessarily be the most secret, but they are usually based on personal data unique to you, and they are fairly obscure to those outside of your friends and family. Something You Are: Returning to the Hollywood example used earlier, fingerprints are just one Security at a glance example of a biometric access control system. Requiring a retinal scan provides Richard Dolan is director of marketing with Datapipe, a more stringent level of security and is frequently used by government agen- which has its East Coast corporate offices in Jersey City. Datapipe provides “application management, hosting and cies, as well as high end data center facilities. security services for mid to large-sized organizations - With a three-factor security system in place, access is granted only when all including cloud computing, infrastructure as a service, platform as a service, colocation and data centers.” three conditions have been satisfied. The resulting high level of integrity is the reason this type of access control is frequently found in e-government applica- Dolan offered this quick summation of three tions around the world. key factors to ensure security of data. PCI Compliance The Payment Card Industry Data Security Standard (PCI DSS) was in- Something you know. This is information troduced in 2004 as a minimum security baseline for merchants and service that only the user will know, such as a password. providers who store, process and transmit credit card data. The PCI DSS is a combination of individual security policies from Visa, MasterCard, American Express, Discover and JCB. For a data center to attain PCI compliance, the

facility must pass an annual audit that verifies security controls and procedures Something you have. This is a proximity are in place that meet or exceed those outlined in the PCI DSS. Visa maintains test, such as a photo ID badge. a global registry of all PCI DSS validated service providers on their site. Beyond SAS 70: SSAE16 Certification

Financial data retention became a liability with the introduction of the Something you are. This could be a fin- Sarbanes-Oxley Act (SOX) in 2002. Requiring businesses to establish and gerprint ID or retinal scanner. document procedures for financial data retention, SOX relied heavily on SAS 70 audit reports. Developed by the American Institute of Certified PublicA c-

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