July 27, 2001 (SAN FRANCISCO) --Overseas markets offer tremendous opportunities for Internet data center developers, but place a premium on patience, diplomacy and good partnerships, according to industry veterans with experience in these markets.
Panelists at the IMN Summer Conference on Financing and Developing Carrier Hotels and Internet Data Centers said Asia, Latin America and Eastern Europe figure to be the fastest-growing regions.
Perhaps the most important decision about overseas expansion is timing, according to Mark Lambourne, Executive Operating Officer at Global Switch, who drew on a decision made by his London-based carrier hotel development firm as an example.
"About two years ago we had a very aggressive plan," said Lambourne. "But we decided not to enter the U.S. market. Every time we looked at a site, the next day someone else was interested and the price went up.
"One of the things you need is patience," said Lambourne. "You can't always send the paratroopers in."
Patience is also important after you decide to enter a market, according to Cardi Prinzi, a vice president with Pihana Pacific, which builds data centers in Asia.
"Everything always takes longer than you expect it to," said Prinzi. "It stretches beyond what you know and what you're used to dealing with."
In some cases, that's because the infrastructure in other countries can be foreign - in more ways than one.
"Power tends to look slightly different in different locations," said Prinzi. "And it's not like the U.S. or London, where you have 12 fiber providers in the street. In Asia, there may be only one or two fiber providers."
"Last year you could not get power in Amsterdam for eight months," said Stephen Worn, director of strategic planning for Nortel Networks. "Power access in Latin America is a tremendous problem."
Once providers obtain power, they must be sure they know exactly what they've actually got, he added.
"Never believe anything anyone ever tells you about the local grid," he joked. "I run from transformers when they start them up."
Some of the most important business issues are not technical, but cultural, the panel agreed.
"Cultural sensitivities are becoming a major issue," said Worn. "It's going to grow more and more important. The right people have to be sent to the right country."
Sometimes these issues factor into the facility design process.
"In Japan and Korea, it's not unusual for people to live and work in a data center," said Charles Prawdzik of EYP Mission-Critical Facilities, which specializes in power availability issues. "You need to consider this."
It's also crucial to learn how to navigate local bureaucratic red tape.
"You will get vastly different codes and implementation of codes in different countries when you have a fire marshal examining a type of facility he doesn't have much experience with," noted Frawdzik.
The key to success in these markets, panelists to said, is "glocalism" - thinking globally but focusing locally.
"You need to have global partners, regional partners and local relationships," said Worn. "You need local experts who know the regulatory landscapes."

OTHER IMN CONFERENCE COVERAGE:
Navigating Through The Wreckage
Focus is on practical strategies for weathering the downturn

Analysts: Hosting Models Can Work
But pricing, financing are major challenges, and the RBOCs are lurking

Smaller Servers, Larger Loads
Ultradense server blades can pack racks - but how to cool them?

Overseas Markets Offer Opportunity
But perils await unwary providers, and partnering is critical

Meet-me Rooms Attracting Attention
Interconnection a major selling point for El Paso, other providers