Data Center Strategy, DTC For Sale

Back in the expansion of AOL’s dial-up business in the 1990’s we consciously made a decision to locate two Tier 3 data center facilities in the Northern Virginia area. The cost of network bandwidth was high and the options for peering and connectivity were plentiful. At the time this move was justified and supported the massive network expansion required to serve 10s of millions of dial-up customers. Fast forward to the present and bandwidth prices have massively declined from over $1000/Mbps to somewhere near $1/Mbps.2-4-Price-Decline-Graph-1The time has come to reevaluate our data center locations and broaden our application geography. In May of 2013 I began building a model to support a sale of one of our data centers by building a long-term data center strategy. This is a multifaceted business case which not only achieves better geo-diversity for our applications but addresses another long standing issue for a company approaching its third decade in existence, paying down our Technical Debt. We will be moving over 26,000 assets in 2014 in support of this plan, vacating two data centers: one on the East Coast, our Dulles Technology Center (DTC), and one on the West coast at the former Netscape location (NTC). (Humorously, this is not the first report of AOL selling DTC, although this one I assure is for real).

By moving this large quantity of assets we are using our Data Center Strategy as a forcing function to address the cruft of legacy decisions and aging hardware. While it may have been easy in the past to default to doing nothing and leaving this aging gear running, now we are going to turn things off and fork lift them elsewhere. Why not address the elephant in the data center, so to speak, and modernize the tools we use to run our business? We won’t address everything, and that is the right decision, but we do plan to simply decommission over 20% of our assets and not replace them, we will save over 1MW of power. In fact, we’re trending above this number already, and we’ve got 11 months to go.

In September 2013 I had won board of director approval to begin our data center transformation and several months of planning and budgeting ensued. We have turned on one new east coast location already and a second west coast location will come on-line in March. On January 6th, 2014 we moved our first hosts into new facilities which we are leasing and began our aggressive migration schedule. Today we’re taking production traffic on these hosts that have moved and are over 10% of the way through our migration. This summer we will vacate our Netscape location and by the end of the year we will have completed the DTC migration as well.

While not a primary driver, our 5-year projections have us saving money on operating expenses from our initial state. The timing and the market are right for us to be making this bold step forward and continue the amazing transformation of AOL that we began in 2009.

If you are in the market for a “state-of-the-art” Tier III data center facility, we’d be happy to talk with you.

Dulles_Tech_Eblast

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3 thoughts on “Data Center Strategy, DTC For Sale

    1. Some equipment will be returned as part of our leasing agreements, the rest fall into two categories:
      1) an asset that has useful life left will move to our on-hand inventory
      2) an asset without useful life or a platform we no longer wish to support will be sold to third party computer disposal companies.

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