Vendor Neutrality

Background

A while ago I had to keep explaining the ideas behind “Vendor Neutral Data Centres” over and over, mostly when talking about peering. I believe vendor neutral DC’s are a good environment for hosting peering points.

To me the logic and benefits were pretty obvious, but I kept bumping into those stubborn types (change resistance factor) who just don’t want to listen to the voice of reason and kept on asking for an exact definition of vendor neutrality.

Some people you just can’t reach.

They claimed that “vendor neutral” could mean any number of things to different people. I did not find much on Wikipedia and a few examples of UK/US data centre with vendor neutral business models did not seem to make an impact.

So, I figured I’d make a few notes and write it all down.. maybe I’ll add it to Wikipedia.

What is a Vendor Neutral Data Centre?

Before we start, I guess I have to say I am a founder and shareholder of South Africa’s first vendor neutral data centre business: Teraco… but I’m not involved in the day-to-day running of the business. I should also add that a big part of my motivation for starting Teraco comes from an experience involving a local peering point project failing because of the anti-competitive interconnect policies of a single-vendor data centre… but that’s old news, circa 2002. More about this later.

Let me give you my attempt at a summary…

Vendor Neutrality in the data centre market refers to a specialised and focused business model, where a provider limits its activities to a fixed set of value layers in order to avoid conflicts of interest. The provider creates an open market and a platform for others to add value. The provider remains neutral and independent and offers standard open interconnect policies. This results in greater flexibility and wider choice for clients.

There are a few similar sounding terms like.. Telco Agnostic and Network Independent. These mostly refer to network infrastructure and IP transit services. I think “vendor neutral” goes a bit further and refers to a business model which is independent of all parties which add value further up the chain… these could be: service providers, consultants, DR solution providers, storage providers etc.

This brings us to the concept of “value layer abstraction”. Vendor neutral data centres focus on the bottom value layers in the stack of services customers in data centres need: space, security, power, environment (aircon) and cabling.

If you want to think about this in a (OSI) networking stack model: They stick to Layer 1.

Vendor neutral data centre’s have proven to be a successful business model in Europe and the US. Examples would be: Telecity and Equinix.

In some ways it’s more of a property leasing business than an ICT business.

An easy way to test if a data centre is vendor neutral is to see if the sales person you deal with will sell you data centre space and IP transit services.

South African Context

It has long been the norm in SA that a business or ISP has one upstream provider.. a single point of failure. This is not really how the internet was designed to work. The internet is about democratization, decentralization and dense interconnectivity. You could say internet is built on a vision of anarchy.. order without leaders and central control.

In SA (until January 2009) you were pretty much forced to buy your IP transit (internet access) from the same guys who provide you with data centre services. This comes from an era where last mile costs were very expensive and it made sense to be close to your one ISP.

With a bit of luck, the SA telecoms landscape will change radically over the next 3 years and network operators will see the value in the vendor neutral data centre model. We’ll see businesses and ISPs connect to two or more upstream providers in a more flexible hosting environment and we’ll see good growth in peering traffic.

Benefits and Attributes of Vendor Neutral Data Centres

  • Focused on the data centre infrastructure business, specialised and efficient
  • Create a platform for others to add value, an open market
  • No conflicts of interest, focus, not competing with customers
  • Truly independent and unbiased
  • Greater flexibility and no “lock-in” effect
  • Less exposure to single provider instabilities
  • Dense interconnection with no restrictions on connections between customers
  • Consistent pricing structure for interconnect medium
  • Greater competition between providers, avoids anti-competitive behaviour
  • Lower costs, better value
  • Best-of-breed choices, buy voice from the leader in voice services, buy IP transit from the operator(s) that offers you the best solution
  • Good environment for peering points

Let me know if you can think of more benefits or attributes I should add..

3 thoughts on “Vendor Neutrality

  1. Hey Joe. When I first saw the term “vendor neutral” the word vendor made me think hardware/software rather than connectivity. I think others might make the same association with the term.

    Another benefit for customers is that they can consolidate their systems. eg. instead of putting 4 servers in 4 different data centres to connect to 4 ISPs, they could put 1 in Teraco and maybe 1 other elsewhere.

    Good luck with Teraco. I’m holding thumbs for its success!

  2. “Vendor” here is hardware/software/consulting/connectivity.. anybody selling stuff to people in the DC.

    Good point about consolidation.

    Thanks.. tours start in Jan (-:

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