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Carrier Neutrality

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					    Carrier Neutrality
Businesses, ISPs, carriers and ICT companies face three alternatives to address the ever growing demand for data
centre space to house burgeoning IT and networking equipment. They can build or expand their own data centres;
they can outsource their data centre needs to a carrier owned data centre; or they can outsource to a carrier
neutral data centre, which is not owned by, or aligned to, a carrier or internet service provider. (More specifically, a
vendor neutral data centre is not just carrier neutral but outsourcer neutral i.e. it is operated by a company which
provides no services except the data centre itself.)

What does this mean?                                                          Why is all this choice and
Carrier neutral means that any customer within                                flexibility important?
a Teraco data centre can:
•   connect to any Carrier or Network Operator                                With the influx of new international telecommunications cables
•   connect to or purchase services from any Service Provider                 landing in SA, international bandwidth prices have tumbled
•   outsource services to any IT services business or                         in the last four years and are set to further in the next four.
    systems integrator                                                        Locally, Telkom’s monopoly ended brusquely in 2007: now over
• connect and offer services to any customer within each                      300 companies have been licensed to build networks in SA and
    data centre                                                               at least 20 of them are actively doing so. For some companies,
• know that there will never be a conflict of interest                        this rate of change can make binding decisions unpalatable at
    between its needs for service flexibility and the business                best. By keeping options completely open, companies locating
    of the data centre operator                                               their equipment within a truly neutral data centre can react as
For all of these interconnections within the data centre, Teraco              the market develops, connecting to new carriers and service
charges a minimal and transparent fee (e.g. R350 per month for                providers.
a fibre pair (i.e. 40Gbps) connection.


“Ensync, a managed MPLS network provider, realised the potential in the flexibility and scalability offered
by a carrier neutral colocation facility and has seen the need for this in the SA market for some time now.
Teraco offered exactly that and it simply makes sense to partner with Teraco as it offers customers the
freedom they require and the quality few other service providers can compete with. Moving our business
to Teraco offers both Ensync and our customers access to a world class facility and high speed access is
available at a fraction of the cost previously offered” Eduard du Plessis CEO, Ensync

An International Perspective
This isn’t new. Across the world, operators (carriers, ISPs etc.)
offer data centre solutions to clients buying other services
from them. Many companies are happy to buy, for example,
their hosting including bandwidth, from one service provider.
But to those other companies which require independence and
flexibility, the carrier neutral data centre sector has provided
an ideal solution. The sector has grown at a dizzying rate.
Telehouse opened the world’s first vendor neutral data centre
in London’s Docklands in 1990. There are now several million
square metres of carrier neutral data centre space around the
world offered by global groups such as Equinix, Telehouse,
Telecity and many others. In Europe, there is now more carrier
neutral data centre space than carrier owned space*, which
reflects the changing patterns of customer demand.
* In 2009, Broadgroup estimates there is 606,000sqm carrier neutral data
centre space and 470,000sqm of carrier owned data centre space across
Europe] Ensync, a managed MPLS network provider, realised the potential
in the flexibility and scalability offered by a carrier neutral collocation
facility and has seen the need for this in the SA market for some time now.




Postnet Suite #338, Private Bag X2020, Isando, • PHONE +27 860 837 226 • FAX +27 860 837 329 • www.teraco.co.za
1600, South Africa                                       Teraco Data Environments (Pty) Ltd • Registration Number 2007/004268/07
Version Number 6
 Carrier Neutrality

                                                                                                     Telehouse in South Africa


   Most companies with a network in Europe know, or have a point of presence in, Telehouse. The Telehouse East data
   centre now houses over 400 carriers and ISPs and offers the widest network choice, interconnection and flexibility
   available. It is host to the London Internet Exchange where among the largest volumes of internet traffic in the world
   are exchanged. Expanding its carrier neutral business model to South Africa, Telehouse Europe in Dec 2009 opened
   a facility within both Teraco Cape Town and Teraco Johannesburg data centres.


And South Africa?                                                   Absolute Focus
Until Teraco opened its doors there was no carrier and vendor       Carrier Neutral data centre companies such as Teraco focus
neutral space in South Africa. Operators such as carriers,          on the data centre service part alone. Teraco’s business is
service providers and systems integrators offering data centre      about being the best at just that, leaving the other services to
services seek to bundle their data centre service (or colocation)   its customers. This ensures there is never a conflict of interest
with their other core business services such as bandwidth,          with its customers, as they seek flexibility in choice of carrier
interconnect, managed network services etc. In fact, the norm       and service provider in the future.
internationally for carrier-owned or systems integrator-owned
data centres, is for the data centre service to comprise just       Some questions to consider when
10-20% of the revenue the operator seeks to derive from its         selecting your data centre provider:
customers in that centre.                                              Once located within the provider’s data centre, how freely
                                                                       can you change carrier or service provider?
                                                                       Will you be charged a cross-connection fee for connecting
“Our business demands uptime, all the time.                            to a competitor of that operator? Might this be increased,
Relocating our hosting operations into the                             or even prevented in the future?
neutral Teraco centre was an easy decision.                            Can you just buy collocation from your provider and shop
                                                                       around for all other services, or must you take over
Teraco controls the environment for our                                services from that provider as well?
equipment, ensuring optimum cost                                       If you are a service provider, will the operator you locate
efficiency and 100% availability. This gives                           your equipment at offer some of the same services as you?
us peace of mind and allows us to focus                                If so, might there be conflict?
                                                                       A carrier neutral data centre will actively market
on our core business. Furthermore moving                               its clients’ services to each other (for example Teraco
from an ISP’s data centre into Teraco has                              communicates all carrier and service provider products,
greatly increased our interconnect options                             offers and promotions to all of its clients). Would a carrier-
                                                                       owned data centre promote special deals offered by its
which will enable us to continue driving our                           competitors?
bandwidth up and our prices down.”                                     How critical is your business to the operator? Is the data
Matt Tagg CEO Web Africa                                               centre service offered to clients a major component of
                                                                       that operator’s business, or would its network come first
                                                                       in the case of a problem?

In Summary
Many businesses, and even smaller ISPs, prefer the simplicity of a one-stop shop, even with the reduced options and potential
restrictions that may present. For those that require independence and options, it is certainly worth reevaluating network and
service design, around truly neutral data centres. Teraco data centres are situated on the fibre rings of all carriers so, whichever
service provider or carrier solution you are evaluating can also be delivered to your equipment at Teraco.


Teraco
In February 2009, Teraco Data Environments opened its first vendor neutral data centre in Rondebosch Cape Town (CT1). Teraco’s
second data centre, in Isando, Johannesburg (JB1), opened January 2010. We will be expanding to Pinelands, Cape Town (CT2) and
Durban North (DB1). Teraco Data Centres are located on the fibre rings of the major licensed carriers in South Africa, including
Telkom and Neotel, Broadband Infraco and Dark Fibre Africa all of which have fibre nodes within the building so, whichever
service provider or carrier solution you are evaluating can also be delivered to your equipment at Teraco.

Postnet Suite #338, Private Bag X2020, Isando, • PHONE +27 860 837 226 • FAX +27 860 837 329 • www.teraco.co.za
1600, South Africa                                       Teraco Data Environments (Pty) Ltd • Registration Number 2007/004268/07
Version Number 6

				
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