To Own or Outsource: The Data Center Dilemma Visited in Detail

To Own or Outsource: The Data Center Dilemma Visited in Detail

September 11

Servers and network equipment. Top notch security and monitoring systems. Managed service providers have a myriad of specific needs beyond being adept at the technology and services they offer. Some depend on third-party data centers and infrastructures provided through colocation services. Others operate out of their very own data centers. Does building and/or operating your own data center make sense? Let’s explore this hot topic by taking a look at some of the benefits and challenges MSPs have a head of them.

You’ve Got the Power!

The beauty of owning your home is control. You call all the shots. The same applies in the data center scenario. This control is often desired by service providers who demand total command over sensitive data, operating environment, and aspects such as access and backup power systems. Furthermore, MSPs that run their own data centers eliminate the risk of having their lease or agreement terminated by a third-party service provider.

Long-term Cost Savings

The cost of building and maintaining a data center can be significant. At the same time, the same can be said of alternatives. Over time, it may actually be less expensive for an MSP to finance a data center than pay a monthly bill for hosted environments like Amazon Web Services or Windows Azure. It’s the classic case of renting vs. owning.

Compelling Revenue Opportunities

MSPs are constantly looking for ways to increase their earning potential. The focus is often set on additional service offerings, but a data center represents an outside of the box option with similar potential. With the freedom to share and lease data center space to other companies in need, MSPs can generate recurring income that helps cover operating expenses.

Key Data Center Considerations

Running a data center is an appealing idea for the managed service provider whose rapid growth demands more space, power, and control. Having said that, there are reasons why options such as colocation exist. Here are some of the many challenges MSPs face in getting up and running:

Upfront expenses. The benefits of controlling your own destiny come at the cost of substantial upfront investments. If you’re building a data center from the ground up, then you need to invest in the construction of the facility, which brings building permits and local taxes into play. You also need infrastructure components like premium network connections and equipment as well as systems that control power and the climate of the environment.

Facility location. The location you choose for a data center will say a lot about your ability to satisfy service level agreements and provide a reliable service. Uptime will generally be less of an issue in areas that are not prone to earthquakes, hurricanes, tornadoes, and other natural disasters. Location may also impact your access to internet service providers that can deliver high-speed, high volume connectivity.

Energy efficiency. According to The New York Times, data centers can waste more than 90 percent of the energy they harness from the grid, which is akin to throwing money out the window. In this arena, energy efficiency is affected by everything from facility design to the management of cooling systems. MSPs are advised to explore internal elements such as floor layout and airflow management as well as technologies like virtualization to reduce the energy-related costs of operating a data center and the impact it has on the environment.

Staffing and maintenance. Data centers require around the clock monitoring and on-demand access to maintenance personnel to ensure that on-site equipment continues to run like a champ. The answer lies in a staff that is both dedicated and responsive to the challenges at hand. For MSPs, this likely means bringing an all new team aboard to handle new responsibilities.

Whether it’s merely operating or building from scratch, going at it alone with a data center requires the utmost in due diligence. Managed service providers would be wise to give careful thought to both the advantages and challenges before making a decision that could change the complexion of their business for many years to come.

Photo Credit: Michael Gray via Flickr