Counsel to Counsel - January 2008 - (Page Cover3) Whatever the need, deciding to move your servers offsite is just the first, and the easiest, step in the process. The next step is figuring out what kind of facility you need. Obviously, the ideal situation is to custom build your own data center, staff it and secure it in whatever way you see fit. Of course, that’s an extremely expensive proposition and fraught with its own snares and pitfalls. Most companies choose to lease space in an existing facility. But again, there’s a lot to consider. Do you need to control your own secure floor with dedicated infrastructure, or are you willing to share space with another tenant? If you share space, do you share power? What happens to your equipment when the neighbor’s system crashes? Who provides security? What kind of backup systems are in place? “I had one client that went into the deal thinking they had no problem sharing a floor with another tenant, including the supporting infrastructure,” Olschansky says. “When they realized all the ramifications of that, from security to power to fire suppression, they did a 180 and went with a full-floor dedicated infrastructure lease transaction. It was a completely different deal and vastly more expensive.” Data centers can be an object lesson in getting what you pay for. The basic technical requirements may seem straightforward on the surface, but ensuring the security and reliability of the center always costs more. This requires counsel to conduct a detailed and far-ranging cost-benefit analysis. “The big question to ask is: ‘How critical is this function?’” Olschansky says. “If your server is down for an hour, does it cost you a hundred million dollars?” they don’t provide for adequate expansion, or they need more power than the facility can provide. It’s often a result of inexperience.” Companies must be clear about their longterm needs and expectations on the front end if they don’t want to get burned after the ink is dry on the lease agreement. For that reason, Olschansky suggests an together a data center deal is power. It’s not just the amount of power either. The reliability of power and especially the expandability of power are critical to the long-term viability of offsite servers. “Unlike other real estate transactions, there’s another dimension on this chessboard,” Olschansky says. “A data center is not just a physical space. The expandability of the space is directly related to the power availability, and the infrastructure availability to support the power.” In other words, without increasing any square footage of your space, you could double capacity by increasing the available power to the space on a square-foot basis. Technology is fluid, standards evolve and companies grow. It’s essential that your power requirements can grow as well. “In analyzing a space, be sure you reserve the right to expand,” Olschansky says. “Otherwise, you may find yourself doing another expensive relocation a few years down the road.” “The big question to ask is: ‘How critical is this function?’ If your server is down for an hour, does it cost you a hundred million dollars?” interdisciplinary team approach: Assemble all the people whose expertise can inform the process and create an honest and realistic checklist of all the requirements you have for an offsite data center. “You have finance, real estate, IT, maybe even HR, and they all need to have input into this process,” he says. “The IT people may initiate the process, for example, but they don’t necessarily understand the real estate issues.” The team approach shouldn’t be limited to in-house players, either. External experts, such as brokers, consultants, relocation specialists and hardware providers, can all help the company determine its actual data center requirements. “In-house counsel are ideally suited to quarterback this team,” Olschansky says. “Because they have their hands in so many different things, in-house counsel are able to find the right resources and lead the development of the checklist.” Thompson Coburn LLP is a full-service law firm with offices in Chicago, St. Louis, Southern Illinois and Washington, D.C. The firm serves clients across the United States, including more than 100 Fortune 500 companies. The firm includes more than 330 attorneys working in 35 practice areas. Thompson Coburn is the largest law firm in St. Louis (based on number of attorneys in St. Louis), and is ranked among the top law firms nationwide in the development and application of client-focused technology. Article Participant: Craig A. Olschansky Partner colschansky@thompsoncoburn.com Peer Review Rated The Master Checklist “People get into trouble when they make a deal that’s not correct for their company,” says Phil Horstmann, president and CEO of Ascent Corp., a company that designs, builds and operates data centers. “Maybe Power, Power, Power Perhaps the single most important thing for counsel to keep in mind when putting martindale.com/c2c JANUARY 2008 33 http://www.martindale.com/c2c
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