Last year The Channel covered data centers in an in-depth series, but, with 97% of companies in New Zealand having 20 employees or fewer, it's time to take a look at the humble server room in a small or medium-sized business and the opportunities a server room sale or upgrade presents to you.

I say the ‘humble' server room, but in reality the complexity of even a small server room has increased drastically over the years. Once upon a time a server room graduated to a data center when it reached a certain square metre size, but now, with increasing storage, availability and bandwidth requirements, even a small server room can be a complex affair that requires an expert's help to set up and maintain, and draws the equivalent power to that of a data center 10 years ago!

This represents a large opportunity for you, as there are plenty of small business owners out there with barely an iota of IT experience but a burning need to grow their IT resources in line with their business requirements.

These days a small business may only run a server or two but IT has taken centre stage for most businesses, thanks to the availability of enterprise-grade software tailored to small businesses, large but cheap storage silos, the increasing implementation of VoIP and cloud-based computing, and the ever-increasing mounds of digital data generated on a daily basis.

HP's SMB Server Product Manager, HP South Pacific, Ari Palandjian  elaborates: “Over the last five to 10 years IT is no longer the supporting act for a small business, but it's really  core to their business operations, so building growth into a server room needs to be considered really  right up front at the planning stage and considering the short-term and longer-term needs of that business.

There are still many business owners who do not really understand what this means in terms of IT setup and equipment support and protection. One interviewee, who wished to remain nameless on this point, said he's seen it all, from servers housed in the cafeteria to a corner of the men's toilets! I'm sure you all have your own horror stories with regards server housing and treatment, but these should simply underline the fact that there are many businesses out there ripe for IT transformation, with a little helping hand, and flexible enough to do it. People wouldn't leave their dog – a central member of the family – in a damp, smelly place without adequate food and water, so why do the same to their IT equipment – the core of their business?

Building the beast a kennel As the server becomes more critical to how well the business functions, it needs to be protected properly.  Andrew Kirker, New Zealand Country Manager of APC, suggests: “Once you're getting beyond a couple of  PCs acting as servers [...] and you're starting to put servers in, you should be looking at a proper environment  in terms of physical control and security.

It's at this point that, as Emerson Network Power's Senior Marketing Manager ANZ, Peter Spiteri puts it, your nice little kid of a server room turns into a “temperamental adolescent”. PCs are built to be more physically robust and to withstand greater temperature variations;  however, they don't have the same availability as a server, so they are not ideal for holding mission-critical information. That said, it means you need to protect your server better than a computer.

Kirker recommends that you take the opportunity to get the project going early, identifying growing businesses and providing a smooth plan to move them to having a server room. “If the server room is an afterthought, the architect won't have designed it to be the right shape – meaning that you'll need to be an Oompa Loompa to work in there – and this happens all the time!” he says. According to Kirker, a rectangle is the best shape for efficient use of space.

Similarly, talk about the IT gear that you will need to put into said space, so that you can brief the architect on the dimensions it will need to accommodate. “A lot of architects really don't understand the shape of a server or they don't understand the difference between a comms rack and a server rack,” comments Kirker.

He adds that you should get the IT and facilities departments (facilities look after the physical building and its systems) to talk to one another too, so that you are not trying to fit a square peg in a  round hole.

Protecting the beast Once you've assigned an appropriate space for your client's server room, you'll need to consider how it will be cooled.

Emerson's Spiteri says this is not a simple task and recommends you go in to the project with an engineer. “The wise reseller doesn't just go in there and talk about the application; they go in there and talk about the care of the equipment, hand in hand with a reputable vendor in the infrastructure area,” he says. 

Power and cooling are not IT subjects; they require an understanding of mechanics and thermodynamics –  you'll need an engineer who understands how power reticulates and air flows.

The reseller opportunity,  however, lies in communicating the value of protecting the IT equipment that is now critical to the survival of your customer's business. You should ask, says Spiteri, what your customer is doing for power protection.  “Most resellers won't ask the question because they are scared, because it's got the word ‘power',” he says,  but there are simple plug-and-play UPS products out there that you don't need a licence to install.

Spiteri likens selling UPSs to McDonalds selling fries: that's where it makes its money, and UPS units are the same, offering up to a 20% margin – far better than the average networking or switching equipment. “Twenty percent margins on plug-and-play hardware is as good as you'll ever get!” he exclaims. And in many cases the margin you'll get on a UPS system is more in dollar terms than the margin you will get on the equipment it is protecting.

In a similar vein, Spiteri and Kirker advocate the further protection of the IT equipment through the use of a  proper, computer-grade, cooling system. Kirker explains that, although they may initially appear an attractive,  cheaper option, heat pumps and people coolers are not an ideal solution for a computer room. Firstly, in the event of a power cut, the people-cooling system may not come back on or, worse still, it will come on in heat mode.

Secondly, they strip all the moisture from the air, increasing the likelihood of static electricity causing a short circuit. And finally, they are only designed for use during one-third of the year, so the 10 years the manufacturers say they will last is actually reduced to just three years, at which point the return-on-investment period becomes a much less persuasive argument.

Indeed, some heat pump and people-cooler manufacturers even state in the fine print that the warranty is void should the product be used for cooling IT equipment.

Serving the beast Once you have furnished and cooled your customer's server room, you'll need to consider the type of server and applications they require. As Microsoft New Zealand's Windows Server and Application Platform Business Group Leader, David Rayner explains, small to medium-sized organisations tend to have high growth expectations, so before considering any server room deployment you should first think about your customer's  IT requirements.

“This should help identify the technology investments the business needs to make today, to help ensure its IT platform is future-proofed for the short-to-medium term,” he says. It's also important for your customer to understand how they will manage the infrastructure they have deployed in the server room, as this will have a significant impact on the best solution for the business.

Rayner goes on to say: “The most suitable server product for any SMB will depend heavily on the organisation and what it is trying to achieve. In this respect, partners play a key role in determining the server solution that best suits their customers' needs.

The opportunities in server room deployment for an SMB lie in cost efficiency and scalability. For example,  HP's Palandjian says technology has evolved quite significantly in terms of compute power and power efficiency. You need to consider how much power is coming into the building and look at ways to reduce that,  and look at the amount of equipment and space required to run the IT infrastructure.

“A lot of customers are running legacy infrastructure and have just added stuff as time passes, and now there's no more floor space or power capacity – in essence they've maxed out their compute power,” he says. Palandjian adds that old server room technology is typically inefficient and it may actually be cheaper to introduce and run new products and technologies, some of which have a return on investment of less than three months.

What with the green movement and the recession, power efficiency has possibly never been so sought after or important. Indeed, Palandjian says: “It's important to acknowledge that ‘green' goes hand in hand with cost  savings.

For example, 12 three- to four-year-old servers can be migrated to one modern server but deliver the same compute power, so the power consumption and operational cost savings are significant.

Dell, which recently launched a partner channel in New Zealand (although at the time of going to print had only confirmed a partnership with retailer Dick Smith), was quick to point out ethical and sustainable aspects of the green IT  story too.

Channel Strategy Manager ANZ Rob Makin says: “Often the inherent power saving in green technology converts to a dollar saving. It's not a margin opportunity; it's part of the right solution.

Scalability is another must for a small server room, which is why HP's Palandjian suggests blade servers are a  good option. The blade chassis is able to accommodate multiple servers, so your customer can easily add extra server capacity to grow their IT platform in line with their business. This modular hardware solution also ensures you an ongoing annuity stream, because you can “fully populate the enclosure” over time as well as offering other supporting services.

Dell's Makin agrees, saying rack-mounted products are an important consideration. Makin also sees virtualisation as “key to small businesses”. He says: “We're seeing people create VMs on just one server if they want to use it for multiple functions; there really is no gate of entry for this.” While not everyone will need to virtualise their servers, it is, of course, an excellent way to get 10 to 20  times the productivity out of the same server hardware.

For Microsoft's Rayner, the most significant reseller opportunities often arise from the licensing of software and hardware, as well as the consultancy required to define the solution, manage its installation and provide follow-up services once it is deployed.

And, he adds, “once deployed, a robust server infrastructure also provides additional opportunities for partners to attach further applications and services, creating incremental revenue opportunities”. The key for managing this, of course, is to develop a trusted advisor relationship with your clients, as well as selling services in addition to the hardware and software sales, with a strong return on investment and total cost of ownership argument to improve margins.

Another opportunity, and one we are hearing much about at present, is cloud computing. Rayner says cloud computing has had a significant impact on server rooms in small and medium businesses, because it offers a new and different way of delivering required IT services. “In some cases it will be more cost-effective to deliver services from an in-house server room but in others, it will make more sense to adopt a cloud-based approach,” he explains.

Feeding the IT beast IDC statistics indicate that storage is growing at a compound rate of around 50% per year and, as the price per gigabyte tumbles, small businesses are able to afford more capacity, which is just as well given the avalanche of digital data that is being created daily. Admittedly, it does depend on what type of industry you work in as to  just how much you need, as HP's Palandjian puts it: “It depends on the type of application the business is  running [...] There'll be different needs to address in terms of storage and redundancy.

Hitachi's Channel Manager for ANZ, Steve Kelly, sees virtualisation as a great storage opportunity, saying  “you need to have a storage area network behind a virtualised server”. He says that direct attached storage does not work for virtualisation, and that for any storage capacity beyond one to two terabytes you'll need a  NAS or a SAN. Quite often it's not about spending money on new infrastructure, but finding a better way to do things with what your customer has already got and making that more effective. That could mean using a  technology such as storage de-duplication in order to help with data backups, which is now available at SMB  prices.

For Kelly, the constantly expanding storage needs of many organisations offers resellers an excellent ongoing annuity stream, because storage just keeps growing. “That's one thing you can bet on.

Of course, as Dell's Makin puts it, “successful channel partners really do have the complete solution”, and this could come in the form of new technologies, which small businesses are flexible enough to adopt speedily. 

However, not all of these are right for the SMB. Solid state storage has been on the market for some time now,  but Hitachi's Kelly doesn't see this as much of a reseller opportunity for the small to medium business quite yet. Having said that, he does mention its use as “tier zero” storage in blade servers, thus avoiding the need for a SAN, but he questions its resilience and says it's only good for some types of read-write operations, not others.

In order to provide the right type and amount of storage, you need to consider what applications your customer has (email, firewall, database, SharePoint, an extranet), the service level and availability they require, and who needs to access the data and how often.

Added to this, you need to talk to them about backup and disaster recovery – and the real-world ramifications of losing their data for an indeterminate period, perhaps forever.  Kelly says the infrastructure level is a crucial support of that: “You've got to tie the infrastructure back to how that supports the application and the business process. From doing that you start to discover all sorts of capabilities and possibilities about what you might be able to sell.” For example, what could have initially been a conversation about disaster recovery could turn out to be about business continuity.

In fact, Kelly says that these days “disaster recovery and backup are as crucial as having insurance” and are a  great consulting opportunity for you. According to him, 70% of customers have never done a full restore of their data, and even if they did, it could take a small business with a simple server two to three days to recover one terabyte of data. You need to ask your customer if this is an acceptable situation, or if this may cause the business to fail.

One of the best ongoing annuity streams for you, and often one of the most appropriate and hassle-free options for your customer, is some sort of managed service arrangement. Dell's Makin says organisations need to protect their data, so you have the option to build your customer a server room or offer a managed service.  Makin adds: “Hosting is an important part of that solution.

Tying it up The most important aspect of implementing a new server room solution, or upgrading one, is scalability. Just like a puppy, small businesses need room to grow, so you need to make sure you concentrate on future as well as present needs. This way you can ensure that the infrastructure you put in place now will serve the business well tomorrow, and that you are the person your customers turn to when they need to expand. This may appear to be an expensive exercise but, as last month's article Focus on margin, focus on finance explored, financing options can turn the cost of a new IT implementation into an ongoing operational expenditure that benefits both you and the customer.