aep data center marketing webinar

Marketing your AEP Qualified Data Center Site

September 25, 2013

aepdatacenters.com 2

Presenter Panel

Amy Koscielak AEP

[email protected] (614) 716-1008

Tim Comerford Sugarloaf Associates


Will Steffens Sugarloaf Associates


Pat Lawrence AEP


mailto:[email protected]





AEP At-A-Glance


Partners in Marketing

aepdatacenters.com


Marketing Strategy

INDUSTRY KNOWLEDGE

• Industry Basics • Industry Trends • Economic Benefits

LEAD GENERATION

• The Right Contacts • Multiple Channels • Multiple Touch Points

PROSPECT DEVELOPMENT

• Handling Inquiries • Incentives • Closing the Deal


Industry Basics

Knowledge KNOWLEDGE


Types of Data Centers

• Colocation • Retail (small requirements)

• Rack level • Service Based • Examples

• Cervalus • Savvis • NY Internet • Data Pipe

• Wholesale (used for larger requirements) • White space • Primarily selling infrastructure

or conditioned space • Examples

• Digital Realty Trust • Dupont Fabros

• Enterprise (large corporate or service providers)

• Examples: • Apple • Facebook • Goldman Sachs

• Cloud (IT services provided via telecommunications with the end user unaware of where data is hosted)

• Examples • Amazon • Google • Apple

• Modular (small units to allow for greater flexibility and efficiency

• Examples: • Compass Data Centers • IO


Tier Ratings

The major difference (other than reliability) is the construction cost for the facility. Costs will range from $1,000 to $ 4,000 per square foot (exclusive of IT and site costs).

TIER 1 Less than 28.8 hours downtime/year

TIER 2 Less than 22 hours downtime/year

TIER 3 Less than 1.6 hours downtime/year

TIER 4 Less than .4 hours downtime/year


Site Location Factors

1. Power Availability and Reliability 2. Telecommunications / Connectivity 3. Site Variables

• Water • Sewer • Zoning • Access

4. Site Risks • Natural • Manmade

5. Utility Costs 6. Labor Availability 7. Vendor Access and Proximity 8. Security 9. Transportation 10.Site / Development Costs 11. Incentives 12.Renewable Alternatives

Some Rules of Thumb: • 50% of a building is normally white space • Designed power densities of 150 – 300 watts/sq.

ft. are common • Water demand example: 132k sq. ft. data center

= 5,729,000 gallons / month


Fiber

Source: Allied Fiber


• Web • Data Center Knowledge http://www.datacenterknowledge.com/ • Telcom Ramblings http://www.telecomramblings.com/ • Data Center Dynamics

http://www.datacenterdynamics.com/news

• Research Organizations • 451 Research https://451research.com/ • Gartner Group http://www.gartner.com/technology/home.jsp • Lawrence Berkeley National Laboratories http://www.lbl.gov/

Research and Resources

http://www.datacenterknowledge.com/

http://www.telecomramblings.com/

http://www.datacenterdynamics.com/news

https://451research.com/

http://www.gartner.com/technology/home.jsp

http://www.lbl.gov/


Industry Trends

Knowledge KNOWLEDGE


Current Market

Source: Data Center Sites


What’s Causing the Demand?

In the past 5 years, the number of internet users has increased from 1.043 billion (16% of the world population) to 2.11 billion (30% of the world population).

Estimated total colocation space in use in the U.S. in 2011 was 67.7 million sq. feet. This is projected to expand to 144 million square feet by 2015, based on growth projections by providers. Data Center Knowledge

TechNavio's analysts forecast the data center construction market in the US to grow at a compound annual growth rate of 7.61% over the period 2012-2016.

Roughly 8.75% of total enterprise data center space is currently in colocation. That total will increase to 14.11% by 2015. Data Center Knowledge


Market Forecast

14.66 17.00

20.54

24.81

14.07

20.76

23.73

30.81

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2012 2013 2014 2015

Colocation Supply vs. Demand New Space Available New Space Required

Source: Nemertes Research / Data Center Knowledge

The bottom line? Enterprise colocation demand will outstrip colocation service provider supply starting this year, unless colocation providers expand at a faster rate than current growth rates would indicate. In other words: Watch out for the coming colo crunch!


• Modular • Growth of colocation • Cloud • Smaller sites • Second tier markets • Increased densities • Energy efficiency • Wholesale / Retail convergence • Recognition of incentives • Increased demand for data

• Banks seeing 50-100% growth in data requirements • Cisco –internet traffic growing 61% from 2007 - 2012

• Selling bytes not power • Green

• Solar • Cogeneration • Renewable resources

The most important trend? Data center expansion into the second tier markets and the opportunity it provides. Think of data and the access to telecommunications as an ED tool.

Trends


Economic Benefits

KNOWLEDGE


Building Specifications

Building Size: 230,000 SF

Interior Portion of Building to Be Renovated in Phase I: 58,800 SF

Rack Space (raised floor computing area available to

tenants):

30,980 SF

Network Operations Center (NOC): 3,700 SF

Mechanicals and Supporting Infrastructure: 6,300 SF

Office: 6,800 SF

Miscellaneous (restrooms, etc.) 11,020 SF

Total Estimated Construction Expenditures $54,319,795

Project Example

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=g7uHXE4UoKrrWM&tbnid=m8DAjCnVgW3y9M:&ved=0CAUQjRw&url=http://www.csoonline.com/article/220665/19-ways-to-build-physical-security-into-a-data-center&ei=l0QmUtDcFJi84AOm7IDACA&bvm=bv.51495398,d.cWc&psig=AFQjCNFLVWyz7IGZ1hJHbO2AIi-_vlMsPg&ust=1378320696877680


Estimated Economic Impacts (Direct, Induced and Indirect) Over Ten Years

Impacts to COOK COUNTY, IL

Job Creation Earnings Added to Local Economy* Direct

Indirect and Induced Total

Construction Phase NA 642 642 $30,103,111

Ongoing Operations 22 143 165 $72,022,310

Potential Implications Over Ten-Years

22

785 (temp +

permanent)

807 (temp +

permanent) $102,125,451

* “Earnings” refers to total earnings added to the local economy, not the specific revenues of the data center itself.

Estimated Net Tax Revenues

Taxing District Net New Tax

Revenues Over 10 Years

Board of Education $2,810,080 City $850,020 County $451,700 Forest Preserve District $56,700 Metropolitan Water Rec. Dist. $312,850 City Library Fund $108,500 City School Building & Improvement Fund $116,350 Community College District $161,300 Park District $338,830 Total $5,206,700

Construction & Taxes

Three Types of Job Creation Data centers contribute to local employment in three forms: • Direct jobs – employees of

the data center • Indirect jobs – jobs created

within the data center’s supplier network to service the new facility; and

• Induced jobs – increased

employment in the consumer4 sector as a result of the spending of wages in the local economy to pay for groceries, clothes,


Employment Projections

Job Title Employees Average Wage*

Security 8 $25,220

Salesperson 2 $77,740

Engineers (Hardware and Software) 2 $90,080

Building Cleaning Worker 1 $28,460

Data Center Manager 1 $115,240

Data Center Technicians & Network Admin. 8 $77,150

TOTAL Jobs/Weighted Average Wage 22 $59,014

* Based on U.S. Bureau of Labor and Statistics. May 2011 Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates. Chicago-Joliet-Naperville, IL Metropolitan Division.

Employment

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=uJKYHWLl2MGbqM&tbnid=R77X47S6t7qSXM:&ved=0CAUQjRw&url=http://www.maintenanceassistant.com/product/industry-solutions/data-center-maintenance-software/&ei=yEUmUsHbKIWl4AO8r4HYCg&bvm=bv.51495398,d.cWc&psig=AFQjCNFLVWyz7IGZ1hJHbO2AIi-_vlMsPg&ust=1378320696877680


The Right Contacts

LEAD GENERATION


• American Electric Power (AEP) • Engineering Firms • Architects • Technology Community • Vendors

• Generators • Hvac

• IT Companies • Telecommunication Companies (Large and Small) • Developers • Real Estate Brokers • Trade Associations • Colocation developers • Site selectors • Consultants • Construction firms (including project management) • Internet and media

The Data Center Network


Multiple Channels, Multiple Touch Points

Lead Generation LEAD GENERATION


• Networking • Web and Social Media

• Develop your LinkedIn to target the industry • E-blast

• Direct • Trade Shows/ Events

• AFCOM – annual event “Data Center World” • 7x24 National– bi annual conference (east and west coast) • 7x24 Regional – local chapter events • Data Center Dynamics – private group that sponsors regional events • IMN • Cap rate events – private group that runs events (National Data Center Series) • Events associated with data center operations • IT related trade groups

• Trade Associations • AFCOM – (http://www.afcom.com/ ) national and local • 7x24 (http://www.7x24exchange.org/ ) national and local • Green Grid (http://www.thegreengrid.org/ ) • Uptime Institute (http://uptimeinstitute.com/ )

Channels that Work

http://www.afcom.com/

http://www.7x24exchange.org/

http://www.thegreengrid.org/

http://uptimeinstitute.com/


Web


Direct Marketing

Personal Contact Email Mail


Direct Marketing

Personal Contact Email Mail

End Users Consultants

1. Minimize Risk

2. Reliable Power

3. Speed to Market

Three Campaigns


Strategic Events

AEP 2013 Calendar

Data Center World Spring Conference

IMN Data Center Spring Forum

7x24 Data Center Spring Conference

7x24 Data Center Fall Conference

EUCI Data Center Forum


Advertising


Social Media


Responding to Inquiries



Information & Local Knowledge

• Key data • Power infrastructure • Sewer • Zoning • People

• Answer inquires quickly or get back to them ASAP • Position yourself as the “go to” person

• Know the sites and have an inventory • Know the key people • Know the answers and if not, know how to get them quickly • Sell others on the “need for speed” • Remember the client will follow-up with in depth due diligence, but you need to

provide quality answers to the critical questions • Build a network • Sell the incentives

Usually a user has a deadline to satisfy a client or corporate need and will default to the “path of least resistance”. As an economic developer, you provide a unique resource to a site selector-- local knowledge.


Incentives



• Data center targeted incentives are relatively new due to the perceived lack of job creation.

• Currently over 15 states offer data center specific programs and incentives.

• Most programs center on tax exemptions or credits • Business personal property tax • Sales taxes • Real property taxes • Investment tax credits

State Incentives


States with Incentives

• Alabama: Real & personal property tax abatement • Arizona: Exemption from sales tax on building, equipment & power • Iowa: Sales & Property tax exemptions • Louisiana: Up To 10 year property tax exemption • Minnesota: Full exemption on Personal Property, 20 year sales tax exemption, 20 year sales tax exemption

on energy • Nebraska: Sales tax exemptions, person property exemption, job tax credit, investment tax credits • North Carolina: Sales tax exemption to 1% • New York: 20 year PILOT, sales tax exemption • Ohio: Sales & Property tax exemption • Oklahoma: Sales & property tax exemption • South Carolina: Sale tax exemption on power, equipment & software • Tennessee: Sales tax exemption, Tax Credits, Reduce sales tax on energy • Texas: Sales tax exemption on power, and equipment up to 15 years (effective 9/1/13) • Virginia: Sales tax exemption • Washington: Sales tax exemption • West Virginia: Sales tax exemption on construction, equipment & software; salvage value of personal

property. • Wyoming: $2 million in grants for energy efficiency

Other states have incentive programs that a data center project may be able to take advantage, however they do not specifically target data centers.


Partners in Marketing

• Prospecting lists • Web • Advertising & collateral • Email marketing

– Constant Contact – Discounts for 501(c)(3)

– www.constantcontact.com

AEPED.com Property Quick Links

Roanoke County Center for Technology www.aeped.com/rccrt

Industria Centre Site #17 www.aeped.com/ics

Progress Park www.aeped.com/progresspark

Cherokee Expressway #10 www.aeped.com/ceip

Wolpert Greenfield Site www.aeped.com/wgs

National Cyber Research Park www.aeped.com/ncrp

Findlay Commerce Park www.aeped.com/fcp

Bradley Square www.aeped.com/bradleysquare

The 59 Industrial Park www.aeped.com/59ip

http://www.constantcontact.com/

http://www.aeped.com/rccrt

http://www.aeped.com/ics

http://www.aeped.com/progresspark

http://www.aeped.com/ceip

http://www.aeped.com/wgs

http://www.aeped.com/ncrp

http://www.aeped.com/fcp

http://www.aeped.com/bradleysquare

http://www.aeped.com/59ip


Contact Us

Amy Koscielak AEP


Tim Comerford Sugarloaf Associates


Will Steffens Sugarloaf Associates


Pat Lawrence AEP






Thank you.


Tier 1 Provider - is one that can reach every other network on the Internet without purchasing IP transit or paying settlements. They can be regional, national and international.

Tier 2 Provider - A network that peers with some networks, but still purchases IP transit or pays settlements to reach at least some portion of the Internet. Resellers of services from tier 1 networks.

Tier 3 Provider - a network that solely purchases transit from other networks to reach the Internet. Long Haul – long distance fiber primarily provided supporting the Tier 1 networks Metro / Short Haul – Tier 2 and 3 networks. PoP –point of presence is an access point to the Internet. It may be either part of the facilities of a

telecommunications provider that the Internet service provider (ISP) rents or a location separate from the telecommunications provider. ISPs typically have multiple PoPs, sometimes numbering in the thousands. PoPs are also located at Internet exchange points and colocation centers.

ISP – Internet Service Provider - business or organization that offers users access to the Internet and related services. Many but not all ISPs are telephone companies or other telecommunication providers.

IXP – Internet Exchange Point - a point through which Internet service providers (ISPs) exchange Internet traffic between their networks.

Meet me Room - is a place within a colocation center where telecommunications companies can physically connect to one another and exchange data.

Cross Connection – connections from one network to another.

Fiber Definitions

aep data center marketing webinar

Business

temp permanent

sales tax

local economy

sales amp

personal property

world population

telecommunications

equipment