Current trends in data centre outsourcing Colocation Whitepaper April 2013 Related product: Teraco colocation services

Global IT Outsourcing Trends CURRENT TRENDS IN DATA CENTRE OUTSOURCING 1 Global IT Outsourcing Trends IT execs worldwide say: “Owning and operating IT infrastructure results in higher costs and wasted resources” ~ 60% agree “Expect to save on average 25% of IT budgets through outsourcing” “Cloud will play a huge role in the IT landscape over the next decade” “Providing competitive advantage through enhanced agility, scalability and operational efficiencies is top priority” “Purchasing IT assets turned out to be a mistake” “IT infrastructure ownership ties us into specific assets, undermining the ability to move with changing environments” “We already outsource over 25% of our IT infrastructure” “In 5 years time, over 40% of our IT infrastructure will be outsourced” “Outsourcing is key to meet continually evolving compliance requirements, like King III in SA” What’s driving demand? Exponential growth in mobile platforms (39x over last 6 years); video and real-time applications (5x); IP traffic (4x). Massive shift to virtualisation in the cloud. On-going efforts to secure space, power, cooling and low latency network connectivity. Organisations unwilling to invest significant capital in DC infrastructure without knowing future dynamics of power, space and cooling requirements. Source: 2012 Global IT Leadership Report

Benefits of Outsourcing CURRENT TRENDS IN DATA CENTRE OUTSOURCING 2 Benefits of Outsourcing Services are flexible and adaptable to business needs. “Pay-per-use” model provides for scalable cost relative to services used. Key benefits include: - cost reduction or containment - infrastructure scalability and flexibility - improved quality of service as a result of vendor’s dedicated focus Source: 2012 Global IT Leadership Report Source: Fast Forward to 2013: Savvis

True costs of DC ownership CURRENT TRENDS IN DATA CENTRE OUTSOURCING 3 True costs of DC ownership True / False? TCO = Cost of space + Cost of power? Capital Costs Ave R150k/m2, which moves to R250k/m2 for Tier III configuration (99.999% uptime) and upgradable Power Capacity requirements – estimated demand over the next 4-8 years’ Upfront planning, design and commissioning: Design kw/m2 Location Access to fibre connectivity and redundant links Accessibility to power, local council applications, estimate future use Capital budgets Lead times / Construction time Power availability now and in the future Base building shell and property Data centre infrastructure, mechanical and electrical Fire suppression and detection Security Monitoring systems Operating Costs Staffing and operational environment 24*7*365 Network connection costs – fibre connectivity to site from primary and redundancy Power, Power, Power (not only IT power but facilities use of power – cooling) Annual facility and infrastructure maintenance Staff skills ource: 2012 Global IT Leadership Report

Colocation TCO benefits CURRENT TRENDS IN DATA CENTRE OUTSOURCING 4 Colocation TCO benefits According to Gartner, 64% of organisations engage in some form of datacentre colocation services. Studies show breakeven point for own vs operate per cabinet is approx. 90 cabinets (for capex only – this assumes 100% utilisation from commencement) True TCO requires unused capacity calculation. Space, power and cooling from commissioning through to full utilisation and retirement measurably impacts calculations. Most 10-year DCs fail to reach intended capacity. Typically only 30% is achieved across space, power and cooling. Even a 50% utilisation projection would double TCO – per cabinet Predicting power, space and cooling requirements for 10 years is almost impossible TCO of a rack (both used and unused) is approximately R1m over the DC lifetime (half capital, half operational). Best form of rightsising to adapt IT spend to changing requirements is outsourcing Source: The Elephant in the Room is Lost Capacity, Future Facilities Colocation (n) : “A utility based cost option for physical facilities where IT assets are placed in a service provider’s facility giving the ability to take advantage of shared power infrastructure, HVAC systems, physical security and redundant architecture. Space is leased whilst maintaining ownership and control of assets allowing a company to quickly expand and conserving capital at the same time”

Outsource considerations CURRENT TRENDS IN DATA CENTRE OUTSOURCING 5 Outsource considerations Why outsourced infrastructure? More predictable expenditure model Flexible and pay-as-you-use cost infrastructure Expandability and scalability of footprint Expandability and scalability of power usage Experienced and certified professionals focusing on running datacentres Improved reliability and availability Improved efficiency and performance Reduced and eliminated costs Reduced risks Compliance requirements met – King III Convert your outsource costs into business enablement investments Is your DC provider vendor neutral? Can your business benefit from internet growth and network innovations? Can you leverage cloud applications? Can you leverage a pay-per-use model? Does your DC provider have a virtual marketplace of choice? Can you connect to your partners, suppliers, vendors and customers? How many networks can your business access from your current DC? Do you have access to peering points / exchanges? Do you have access to business ecosystems? Does your outsourcer? Provide access to multiple carriers and service providers? Have multiple fibre connectivity with a ring configuration? Provide locality to local support staff? Have necessary skills to build and run a DC environment? Provide service level agreement underwriting uptime commitments?

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