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

Build, Colo, or Cloud? Five Steps to Help You Decide

The mentality that everyone needs it “yesterday” results in lack of proper assessment and preparation to ensure the right data center strategy is selected.

Industry Perspectives

February 8, 2016

7 Min Read
Build, Colo, or Cloud? Five Steps to Help You Decide

Tim Kittila, PE, is Director of Data Center Practice for Parallel Technologies

On a weekly basis, I get asked, “Should we continue with or expand our corporate data center, or should we move to a colocation facility or move to the cloud?” My response is always an emphatic “yes!”

It might seem like a flippant response to such a big question, but the best solution is likely a combination of these options. The data center strategy question really becomes: “How to analyze, rationalize and leverage all three alternatives for the best outcome.” The reality is that every business is different and a one-size fits all approach (build a data center, co-locate or go to the cloud) rarely is the right answer for all of a company’s applications.

When our team is engaged with a new client to develop their data center strategy, we begin with a front-end assessment to determine their company goals, objectives and reliability needs. We then look closely where they are today and where they are going in the future. This requires working with multiple groups from facilities, IT and executives to really understand their data center requirements. To gain clarity on objectives, align solutions with a mission critical data center strategy, and ensure the client is investing their money wisely, it is critical to begin with the assessment.

Yet in the fast paced technology industry, far too many organizations are guilty of not taking the time to “slow down” before they “speed up.” Another obstacle of slowing down is lack of cross departmental communication, largely between IT and facility teams. This is crucial.

As part of the “slow down,” it is imperative that IT is included in the discussions of what truly drives the data center needs. The facilities, IT and the data center teams must all be on the same page and aligned with corporate objectives. The true goal is to bring together all the key stakeholders to the table to rightsize the data center and ensure it meets each teams’ goals and objectives. This is no easy endeavor, but the “slow down” approach, ultimately allows customers to “speed up” in the long run.

To best determine what combination of corporate data center, colocation facility or cloud-based solution is best for the company, it’s important to consider five critical areas:

Corporate Goals and Objectives

The first step is to understand the company’s business purpose, mission, and vision. We hear repeatedly that at their core, they are really a technology company. We hear this in banking, transportation, manufacturing, healthcare and other industries. Technology is a critical part of business strategy, and the data center is the heartbeat of all the technology. A lack of understanding the business goals and objectives can lead to missed expectations for the data center needs. Discussions around company expansion or potential mergers or acquisitions should also be included in the assessment discovery phase. In short, understanding the goals and objectives of the organization is critical to determine the best approach for the data center. Knowledge of the company’s purpose and plans allows us to visualize how the company will leverage and use the data center now and in the future.

IT Infrastructure and Application Requirements

The next important step is to collaborate with IT to understand the data center IT assets (infrastructure and applications) that currently support the business, as well as the future plans for the company. Understanding the current IT environment and what IT is planning for the next 3-5 years is crucial. This warrants a discovery of all IT assets and applications supported by the data center. It is necessary to collaborate with IT to ensure server, storage, and network requirements are identified. At the end of the day, the data center exists to support the IT infrastructure, which supports the applications and related data.

Every organization has numerous priorities and they almost always differ in importance to the overall business operations. Software applications should be reviewed and categorized by their relative importance to the business operations. It is also important to understand their SLA requirements and dependency to other applications. For instance, if the application requires low latency and high uptime, this may have an important impact on how many and which telecommunication carriers can best support these requirements. These discoveries may influence where this specific application is located within the data center to best serve the company needs.

Another area that needs evaluation is storage requirements. It is common practice to increase the amount of storage that is being provisioned for application development and test environments. However, while very important, these programs are not production applications and thus have different requirements. We’ve found that engaging IT management in the discussion will yield valuable insight into overall storage requirements.

Risk and Reliability Requirements

Identifying the risk and reliability requirements is about managing to the lowest common denominator. There a several key risk and reliability areas to consider.

A significant consideration in gathering risk requirements is to clearly understand the company’s need to adhere to government or industry compliance requirements. For instance, HIPPA for healthcare, or PCI for banking. These are significant requirements and it is important to determine which data center strategy will meet these requirements. When making the decision, it is important to remember that outsourcing the data center is not the same as outsourcing the compliance risk.

One area of risk touched upon is the relative importance of applications. For instance, consider a group of applications that are deemed critical to the organization and the collective downtime cost is significant. This will have different data center uptime requirements than less critical applications. Calculating the “cost of downtime” is an important exercise to consider during this process. Downtime cost should be compared to the cost to mitigate the downtime risk.

For the most part, down time risk can be mitigated through expertly engineered data centers. Redundancy can be engineered throughout the data center infrastructure systems to ensure if one system fails, the other redundant system will handle the workload. Building construction for geographical locations and impact of natural risks to the potential site also need to be considered. However, increasing reliability and site robustness comes with significant costs and needs careful consideration in regardless of a colocation data center or private owned corporate data center. It is important to strike a delicate balance between risk and cost.

Too many times, we see data center clients casually specify a level of reliability that is not aligned with the business risk. Understanding risk in the requirements phase helps formulate the basis of design for the proper level of reliability and costs to properly balance the risk and cost equation.

Space, Power, and Cooling Requirements

With a current and future IT infrastructure model, growth projections and an understanding of reliability requirements in place, the next step is to determine how much power and space is needed to support the infrastructure. This is critical because it is the main cost driver for colocation or a data center build. It’s also important to determine how the power needs might change over time to support the company’s growth projections. Without taking the time to understand these critical variables, negotiating a colocation agreement or sizing the data center build is really just a guess with a very high probability it’s wrong. Whether the applications and related IT infrastructure reside in a corporate data center or shared colocation facility, these steps are critical to determine the right strategy for your business needs.

Decision Framework

Once data center requirements are agreed upon by all the stakeholders, it is time to move to the decision framework phase. The data center needs combined with cost, risk and time aids in making clear decisions. To do this, we leverage the use of a consolidated scorecard to determine which scenario best serves the company’s goals and objectives. With each option, there are always tradeoffs that need careful consideration. The scorecard exercise helps the client understand the tradeoffs between risk, cost and time and provides them with a sound framework to make the right decision for the right reasons.

With the many data center options available today, it is critical to understand your core business, IT, and facilities requirements to make informed, mission critical decisions. We suspect that in the end, some of your applications will move to the cloud, other mission critical applications will remain in your own data center and some will migrate to a colocation data center. The challenge is not answering “yes” to the daunting question of “build, colo or cloud.” The challenge is to be able to know how and why to employ each data center option. Regardless of the data center strategy chosen, slowing down to gather foundational requirements is key to making the right data center decision, and ultimately speeding up.

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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