Insight and analysis on the data center space from industry thought leaders.

The Importance of Scalability and Cost of Data Center Solutions

The need for scalability and cost savings make the choice to use colocation data center services very attractive.

Industry Perspectives

August 5, 2015

4 Min Read
The Importance of Scalability and Cost of Data Center Solutions

Chris Alberding is the Vice President of Product Management for FairPoint.

Two of the most influential benefits in data center solutions are scalability and cost. These two advantages have the potential to impact data center performance the most. They also are key reasons for a business migrating to a service provider’s data center colocation facility.

Scalability – How Data Center Solutions Support Seamless Growth

When a business builds its own on-premise data center, it has a challenging task of determining the best size. The facility must meet current requirements, but it must also be able to address future capacity needs. But how do you rightsize a data center? How far into the future should your data center serve your business?

When designing an in-house data center, cost control and performance depends on not over- or under-building the facility. If you over-build, resources will be wasted – resources that could be used to grow your business.

Idle capacity is not only costly for your business, but you may end up with obsolete technology by the time you need to use it. For example, if you build a data center with an expected lifespan of 10 years, the extra capacity you’ve built to accommodate future growth may become outdated after five years. Not being able to leverage the advances in energy consumption, performance and other capabilities can put your operation at a distinct disadvantage.

Under-building a data center has its own challenges and can be even more costly. If you run out of capacity sooner than you planned, you’ll be looking at a huge capital expense to expand your existing facility’s footprint.

Because of the major issues from over- or under-building, having the ability to scale data center operations quickly, easily and economically is a priority for many businesses. To leverage the most flexible solution, businesses typically select a data center colocation model.

Turning to a data center colocation provider allows you to “pay-as-you-grow.” You can add or contract your leased space as needed and only pay for what you’re using today – no idle or insufficient capacity. You eliminate all facility-related issues and can maximize the value of your IT investment.

Cost – How Data Center Solutions Eliminate Capital Expenses

Because of its many benefits, data center colocation has experienced growing demand in recent years. A major driver for this growth are lower costs for data center solutions.

Data center colocation eliminates the capital costs associated with housing and protecting mission-critical systems. In fact, many companies today question whether an in-house data center is a good investment.

The data center colocation model shifts capital expenses to operating expenses. Building an in-house data center requires a substantial capital outlay. In comparison, data center colocation involves a predictable, monthly operating expense. When you forgo building your own data center, the huge savings can be used instead to help fund your company’s growth. Data center colocation’s cost predictability also improves budgeting and resource allocation.

In addition to being costly, the “build-it-yourself” approach creates uncertainty. As discussed previously, predicting and planning for future growth is extremely difficult. Construction projects are also notorious for costing more and taking longer than originally planned. Plus, you may end up with insufficient capacity to meet your needs over the life of the data center.

Why can data center colocation providers offer cheaper data center solutions? Primarily because they can exploit economies of scale and build facilities for much less than many businesses. Given the magnitude of their data center operations, service providers may have more access to investment capital.

They also have greater purchasing power on energy, connectivity and infrastructure hardware. For example, the size of their operation may enable them to negotiate discounted rates from utilities. Because power is the largest cost component in a data center, any savings can have a significant impact on overall operations.

In addition, data center colocation providers have specialized expertise. With highly trained staff in all areas of data center management on board, they can run extremely efficient operations. A well-maintained data center greatly reduces the risk of costly downtime.

Data center solutions can have a tremendous impact on scalability and cost. By only paying for what you need, your business can avoid the growing pains and capital expenses associated with maintaining an in-house data center. You simply lease more data center colocation space whenever you need it – no need to wait months or years for a complex and costly construction project to be completed.

Industry Perspectives is a content channel at Data Center Knowledge highlighting thought leadership in the data center arena. See our guidelines and submission process for information on participating. View previously published Industry Perspectives in our Knowledge Library.

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