Your company has some decisions to make around the future of your data center. Maybe your current data center can’t effectively power and cool your workloads, or you’re running out of space, or you need a Disaster Recovery site. You’re at the point where you have to decide whether or not it makes sense to invest in expanding your own mission-critical data center, or colocating.
What’s the best business decision for your company? Here’s a high-level list of things to consider:
It all comes down to capital. Is your IT budget growing along with your needs? What’s the best use of capital for your business? Can you justify the Return on Invested Capital (ROIC) in land, shell, generation, switchgear, UPS systems, power distribution, cooling plants, raised floor, conduit, cabling, cabinets, environmental controls, security systems, fencing, etc.? The list goes on.
Once the data center is built, the capital investment isn’t over. Maintenance capital is required to ensure that UPS systems, generators, pumps, etc. are all functioning.
Let’s assume that the up-front and recurring capital requirements are not an issue. Can you really build it? Completely outsourcing the construction is an option; and it comes with a cost. Do you have the experience, availability and staff to manage the General Contractor? Have you the insight necessary to make key design decisions? Does your Basis of Design allow you to incrementally grow and expand?
Now that it’s built, you’ll have to keep the data center operating. That means hiring or sourcing support and maintenance staff like facilities engineers, operations technicians, electricians, and network specialists and paying them retainers or extra fees to be on call. You also have to protect your investment and as important, secure your systems and data. That means access control systems, CCTV and 24x7x365 security personnel.
The biggest expense category in data center operations is utility costs. Unless you’re building to massive scale, you will probably be paying commercial rates for utilities and will be susceptible to fluctuations in demand rates.
These operating costs are compounded if your business requires storing sensitive data like medical or financial records. For these, you’ll need written, auditable process and procedures so that you can prove that you’re properly, effectively and securely managing this data. You’ll need annual attestation that you’re performing to governing compliance standards. This is no small feat.
And don’t forget the network! Ensuring you have Internet connectivity with diverse routes, access to IT infrastructure in other locations, and connections with cloud providers hosting your other services, requires high-speed low-latency private connections that add dimensions of complexity and cost.
By many calculations, the cost to lease space in a data center is about 1/3 the cost of building and operating your own depending upon the data center tier, your program and the timeline. For some slim-margin businesses, the decision is fairly easy, but, for other enterprise-level organizations, the analysis may be more complex.
The data center industry has exploded over the past ten years. Where in the past there may have been few suitable commercial data center options for your workloads, today there are tremendous choices available from colocation providers. The industry has invested and continues to invest billions of dollars annually to deliver secure reliable power and space. There are build-to-suit and sale-leaseback options for custom requirements.
In the end, IT budgets are tight, but your infrastructure needs a place to grow along with demand. You have to decide whether to continue investing or to leverage the resources and investment of data center experts.