From: Eric A. Hall [mailto:ehall@ehsco.com] Sent: Tuesday, April 03, 2001 12:10 PM

Convincing customers that it is cheaper/better to put their main servers somewhere off-site away from them is the challenge. Otherwise more of them would do it.

You understate the problem. Service bureaus and ASPs have one problem in common, MIS/IT departments are loath to place their corporate data (jewels) under the control of another. Convincing them otherwise is an up-hill battle that you will mostly lose. To a lesser extent, this is also true of colos. The other part of the argument, that the local (fully burdened) square-footage is almost always cheaper than decent colo space ($1,200.00 per 1/4 rack, per month, typical). You therefore have two strong motives for locating corp datacenters on-site, rather than off-site. Either one, by themselves, are difficult to overcome. Then you have the third argument; most corporate data centers are used more internally than externally (road-warriors and B2B ops not withstanding). For performance reasons, you want the servers closest to their users. Unless you can get 100baseTX to the off-site facility, this means a strong incentive to mount servers at HQ, not in the colo. We are now back to multi-homing a business. BTW, this entire mess was played out before, in the 70's and 80's ... when the service bureau biz died. At that time SNA APPN/APPC was the network (my briefs were dyed "blue" at the time). The end-game was proprietary pre-internet data centers, connected by mutiple slow links.