IT Club : Lloyds and London Insurance Market

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IT Club Lloyds and London Insurance Market
IXEurope Datacentres
Setting the Standard
Guy Willner, Chief Executive Officer, IXEurope
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In-house Datacentre?
Insurance Industry Challenge...
Reducing datacentre TCO while increasing
business agility

• In-house datacentre
• Significant and continued financial investment
• Expertise to build a datacentre to todays
  standards
• Specialist resource to support and manage the
  datacentre environment for maximum availability
• Practicalities in building redundant and diverse
  infrastructure
• Managing the complexities and environmental
  issues of power and cooling
• Need to be the best in insurance not in running
  datacentres

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Outsourced Datacentre? gt Benefits

• Speed up transactions
• Compete more efficiently
• Reduce IT management costs
• Reduce management overhead spent on DC issues
• Add to credibility
• Operate as a major player
• Access to markets without associated pain

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Outsourced Datacentre? gt Cost Benefits

• CAPEX, OPEX, resource and time
• Benefit from TCO savings of as much as 40 in
  first five years
• Ongoing management costs which can be anywhere
  between 50 75 of the TCO
• Overcome impact of low utilisation, corporate
  datacentre average occupancy is between 60 70
• Sharing costly resources such as power, technical
  skills, support staff, security, monitoring and
  management tools

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Outsourced Datacentre?
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Capital Investment

• Economically and commercially out of the question
• Leasing the space
• Datacentre infrastructure
• Uninterruptible power supply
• Precision cooling systems
• Fire suppression facilities
• Security, biometric and surveillance systems
• Control, monitoring and management tools
• Can cost around 80 more than outsourcing
• Construction costs can easily run up to EUR 4,350
  per m2
• Compared to around EUR 400 per m2 to fit out a
  datacentre suite
• Not forgetting the need to show a return on
  investment

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Impact of Occupancy

• Corporate datacentre average occupancy rate over
  the life time is 60 70 (sometimes as low as
  15)
• Facility over specified at design stage (approx
  10)
• Space required for access corridors, UPS and
  cooling plant requires additional 15 of space
• Datacentres filled over time, leading to empty
  space during first years of deployment
• Organisations that reach unplanned maximum
  capacity can experience significant operational
  problems and need for rapid investment

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Other Cost Implications

• Surprising proportion of setting up costs
• Time spent searching, negotiating, planning,
  designing, specifying and project managing the
  build
• Dealing with legal aspects
• Opportunity cost of taking key resource away from
  core business for 12 months to manage the project

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Operational Expenditure

• Intangible and very costly to support 24/7/365
  operations
• Building lease costs (or interest)
• Maintenance
• Insurance and Finance
• Security
• Round-the-clock support
• Power charges
• Connect fees
• Staff overheads
• Operation costs up to EUR 600 per m2 per month
• Save 33 60 by outsourcing the datacentre
• Pay-as-you-grow reduces cost of under utilised
  datacentre space

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Sharing Datacentre Resources

• Sharing outsourcers costs with other companies
• Benefit from significant economies of scale
• Cost savings on power through group purchasing
  power and more efficient power infrastructure
• Competitive carrier connectivity can save up to
  40 of network costs
• Technical skills employed on a round-the-clock
  basis
• Contracted service level agreements supported by
  people, processes and management tools which
  minimises the cost of downtime
• Maintenance of facilities to ensure that
  infrastructure does not become outdated

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Outsourced Datacentre? gt Quality of Service

• Strategic value of the quality of service
• Level of build significantly surpasses current
  corporate datacentres
• Able to provide the level of resilience required
  by the business
• Designed and upgraded to the highest
  specification
• 1,000 Watts/m2 to support high density computing
• N1 as standard
• Uninterruptible power supply and environmental
  control systems
• Modular and modifiable design
• Rigorous application of service quality standards

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Outsourced Datacentre? gt Core Business

• Foundation of IT infrastructure
• First point of pain in the event of failure
• Direct impact on profitability and reputation
• But does not add strategic value to the business
• Align resource to with insurance business
  priorities
• Access higher levels of service, performance and
  resilience

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Deutsche Boerse Group
A Customer Case Study

• The Customer
• Deutsche Börse Systems (DBS) a 100 subsidiary
  of Deutsche Börse Group develops, builds and
  operates the trading, clearing and settlement
  systems.
• The Challenge
• Launch Proximity Services to the trading
  community in 2006
• Particularly those using algorithmic and
  alternative trading strategies
• Highly dependent on execution speed
• DBS required colocation in close proximity to
  its infrastructure gateway
• Connectivity to the exchange back-end
• Solution
• Proximity Services jointly developed and
  launched in 2006
• IXEurope offers co-location as part of IXFX,
  IXEuropes Financial Exchange Datacentre
  Solution
• Enables financial trading organisations to
  co-locate trading applications in close
  proximity to Deutsche Boerse within the
  IXDatacentre in Frankfurt.

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Deutsche Boerse Group

• Results
• Proximity Services provide ultra low latency
  connection and beat propagation delay
• This is dependant on the physical distance and
  is a substantial time factor in networks
• Reduced execution speeds to an absolute minimum
• In less than four months over a dozen customers
  contracted the service.

Ricardo Naon, CIO, Nico Trading By moving our
core Eurex trading system from Chicago to
IXEuropes datacentre in Germany and using
Proximity Service we are seeing a net reduction
in latency from around 130 milliseconds to less
than 20 milliseconds. Our automated trading
systems benefit from, among other things, low
message latency so this upgrade is making the
difference between a successful and an
unsuccessful trade, especially in high volume
commodities markets.
Michael Kuhn, CIO of Deutsche Börse Group and CEO
of Deutsche Börse Systems By offering
Proximity Services, we are responding to the
growing market demand for low latency access to
our execution venues and our market data streams.
This is a further example of the innovative
customer solutions that Deutsche Börse Systems
offers market participants.
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About IXEurope
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Best Data Centre in Europe Best Disaster
Recovery Services Provider
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Over 450 customers Enterprise, Internet and
Telecom / ISP Markets
Enterprise
Telecom / ISP
Internet
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Contact

• IXEurope
• Europes Specialist Datacentre Services Company
• Guy Willner guy.willner_at_ixeurope.com
• Petrina Steele petrina.steele_at_ixeurope.com
• T 0845 373 2900 W ixeurope.com
• Continuity-Solutions
• Specialist Agents for IXEurope working in the
  Lloyds Market
• Robin DunfordGreen RDunfordG_at_continuity-solutio
  ns.co.uk
• T 01323 488 288 W Continuity-Solutions.co.
  uk

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Thank You
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