Colocation Services Strategy
A national securities exchange in a high-growth emerging market was seeking to bolster its infrastructure to support more inward investment and potentially diversify its revenue streams through the provision of co-location hosting services. As part of its growth strategy, the exchange sought to review its existing datacentre assets to identify any capacity constraints and operational risks, and to assess the local market with a view to improving its own facilities and offering managed co-location hosting services to support trading members.
How Citihub Helped
Citihub began by conducting a detailed review of the exchange’s existing assets and investments. This followed TIA-942 standards and provided a detailed evaluation of space, power and cooling limitations and risks. The assessment was then complemented by a broader review, not only of competing datacentre service providers, but also of local market requirements and demand for hosting services. Citihub’s consultants went through a detailed fact-finding exercise by interviewing local providers of datacentre services, along with potential buyers of those services, including all the leading banks, insurers, and asset managers that had local operations, along with government-owned entities such as the domestic central bank. The results from those interviews were then fed into a detailed supply-and-demand study, which helped to quantify the commercial opportunity for the Exchange.
On the back of that study, Citihub was able to develop five datacentre concept designs, factoring in location strategy, sizing, phasing of modules and high-level designs for critical plant – presenting the executive board with a range of options to pursue. Each option was qualified with a business case – weighing up the potential rewards and risks associated with any investment. Ultimately, Citihub’s recommendation on which option to pursue was reviewed and approved by the Exchange’s chief executive and its board.
Correct analysis of the market
Investments in infrastructure need to be taken with a detailed understanding of current assets and requirements, along with local supply-and-demand dynamics. Citihub not only conducted a detailed a review of the Exchange’s existing datacentre, following internationally recognised standards to assess capacity constraints and operational risks, it was also able to accurately quantify the commercial viability of its expansion plans by conducting a detailed review of key suppliers and consumers of datacentre services.
Realistic growth strategy
Although the Exchange was operating in a high-growth economy, Citihub identified that its existing investment in co-location data centre assets was adequate in terms of quality and capacity for the near to medium term. Citihub’s recommended phasing of investment helped the Exchange de-risk its proposed expansion and defer USD30 million of investment until well defined commercial criteria were met.
A detailed plan to implement that strategy
Citihub provided a phased plan for improving existing data centre assets to support medium-term growth, along with a longer-term plan for investment in new data centre assets as broader commercial criteria were met. The phased plan was fully costed and supported with a strong pipeline of revenue-generating hosting and service requirements. So the Exchange can grow at a steady pace and realise a much better return on its investment.
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