Cloud and Hosting18.07.2013

Standard Bank’s excellent data centre bleeding money

Standard Bank spent R1.6 billion to build a magnificent tier 4 data centre in Midrand, but according to well-placed industry sources, the facility remains mostly empty and is costing Standard Bank millions to keep up and running.

The data centre is widely considered to be the best in the Southern Hemisphere, and features its own electricity sub-station and fully redundant terrestrial, wireless, and satellite connectivity.

Standard Bank DC bleeding money

Building and maintaining this excellent facility comes at a cost. One industry source said that the 27,000 square meter facility, built on a 65,000 square metre site, costs around R1 million per month to maintain.

While the basic facility cost R1.6 billion to build, it did not include the cost of much of the computer equipment and networking requirements. Some experts put the total bill in excess of R2 billion.

According to information received by MyBroadband, Standard Bank is trying to sell the facility to limit its losses, but to date has not been successful.

The bank was, according to these sources, also trying to lease co-location space in the facility to generate revenue. However, security requirements related to a banking data centre put a spanner in the works.

Standard Bank recently told BusinessTech that it was still looking at ways of “commercially optimising the capacity we are not currently using”.

“The nature of the transaction may take on many shapes so it’s too early to speculate,” Standard bank said.

Standard Bank data centre in Midrand

Upgrade to older Standard bank Riverclub data centre

What is curious is that the bank is expanding its existing data centre in Riverclub despite the fact that its Midrand facility has a lot of unused space.

Standard Bank explained that its Riverclub facility is a disaster recovery site and should be a standalone facility to ensure business continuity.

“Standard Bank strives to ensure that there is minimal disruption to its daily banking activities. It is therefore imperative that any backup facility can accommodate the full data load should there be any disruption at any of our data centres,” a Standard Bank spokesperson said.

“In line with good business practice the necessary investments and upgrades are made as and when required.”

Standard Bank added that existing (non-disaster recovery) services are being migrated to the Midrand facility in a phased approach.

“The migration is substantially complete which has enabled us to consolidate and shut down two other data centres. The remaining services will be migrated as and when appropriate,” the spokesperson said.