CyrusOne’s CEO gives a deeper look into why building your own data center doesn’t make the best business sense when examining costs.
Jan 30, 2017
In a previous article, we discussed how building your own data center is similar to owning a farm — it just doesn’t make sense in today’s world.
Companies should instead be looking to build-to-suit data centers, which are facilities that are custom-designed and constructed specifically for your company according to your IT specifications, but the building itself is owned by a data center provider.
Now, let’s take a look at why this is a better option than owning your own data center.
1 Free up your company’s internal resources to focus on your core business
Your internal resources are better spent developing new products, improving current products, and optimizing the customer experience. In other words, doing things that drive profitability and competitiveness.
Building a data center is a time-consuming task. Here is just a partial list of the activities to manage when building a private data center:
- Define requirements for the data center in terms of space, power, cooling, redundancy, etc.
- Allocate capital for the project
- Find a location
- Negotiate a purchase and sale agreement
- Negotiate with local and state governments to obtain zoning, site development, and environmental permits
- Coordinate with local utility companies and network carriers to provide power and connectivity to the data center in a timely fashion
2 Free up your capital for more important, business-building investments
Imagine that your company has to make a choice for next year’s budget. You have $30 million available in capital, and you can spend that money to either develop a new technology that could drive revenue and profitability for your company in five years, or build a private data center.
Obviously, the better use of the $30 million is to drive business growth with the new technology. Avoid the heavy capital expenditure investment of a private data center. Spend that money on developing new technologies, improving your best-selling products or services, or completing other activities that will grow your business, increase your company’s value, and generate returns for your investors.
3 Obtain a build-to-suit data center faster and at a lower cost than if you build it yourself
Building a private data center takes a long time — typically 12 to 18 months or longer. By contrast, some data center providers can deliver a custom, build-to-suit data center in just three to six months. This ensures you have enough IT capacity to support your growing infrastructure demands.
‘Time is money,’ as they say, and with any kind of construction, time saved is money saved.
“Time is money,” as they say, and with any kind of construction, time saved is money saved. The quicker you can complete a construction project, the less you pay in hourly labor rates and equipment rentals. Data center providers use standardized practices and streamlined construction techniques that enable them to complete build-to-suit projects much faster, which reduces construction costs. Since it costs less for the data center provider to build and operate build-to-suit facilities, it also costs less for customers to lease them.
4 Rapidly scale up as needed and eliminate the risk of overbuilding
One of the biggest risks you face when your company builds a private data center is the risk of overbuilding. Companies will usually build a larger facility, with extra space, power, and cooling to support future IT expansions, but once the data center is finished, it may take several years to fill it up with IT equipment. During those years, you’re operating an underutilized asset that’s not generating the promised return on investment.
With modular power and cooling offered by data center providers, you can rapidly scale up to meet your company’s growing IT footprint. If you need an increase in power density, the provider can bring in additional power and cooling units and connect them to your facility with no impact on your current IT environment. What’s more, you don’t pay for additional power and cooling until you require it. You only pay for the power and cooling you are using now.
5 Keep control over security and maintenance
Once a build-to-suit data center project is completed, the internal operations are turned over to you, where you can then hire your own security and internal maintenance staff to take care of your IT footprint within the data center.
This ensures you meet all your security requirements and keep control over your IT footprint. In addition, you can take responsibility over operational and maintenance aspects of the building and interior spaces.
After examining the internal resources needed, capital costs, time-to-completion, required expertise and security and operational costs, it’s clear why it’s so important for companies to trust data center providers for their IT infrastructure needs.
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