Data Center Expansion Plan – Build or Buy?

Demand for data center space is exponentially growing. Data center organizations need to implement more hardware to process, store and manipulate big data. To implement more hardware companies need to buy more lands or need to partner with some existing data centers or acquire any existing facility. Companies of all sizes must go through a critical stage weather to build own data center or to lease an existing facility. Companies need to analyze some points like construction cost, commissioning and costs of maintaining and managing data center before evaluating the decision to build or buy.

Following are some of the key considerations before deciding whether to buy an existing facility or to buy a new facility:

1.       Build Time:

Typically construction of a new data center requires 12-18 months to complete. Suppose

an existing client require to expand their capacity and data center companies need provide the required space in a shorter time-frame, then constructing a new facility will not be a good idea. Most viable option is to co-locate data center space from some other organization or companies might think of acquiring a small data center.

2.       Ability to Scale

A traditionally build data centers have an expected life span of 10-15 years with a minimum of 5 refresh cycles. This might lead to overbuild, capital waste, costly infrastructure and less energy efficient as most of the time servers will be idle. Companies can lease data centers, typically leases are short term of about 3 to 5 years and this allows clients to increase data center space based on their needs. By co-locating companies can reduce cost and add more space quickly.

3.       Money:

The initial cost for constructing a new facility, installation cost can move up-to thousands of dollars.  Companies either get finance from some financing company to construct a new data center, in addition to these companies need to invest to maintain data centers. Companies can lease an existing data center facility by paying monthly or annually based on the contract and provide consistent services to their clients and can expand their space based on their needs.

4.       Location:

Location is one of the primary concerns for data centers for those companies who have planned to build  their own facility. Companies who have elected to buy a data center find local providers within 30 miles from the office. Finding co-location providers is a sensible option, companies can have a frequent visit to the facility. Some companies have an idea of partnering with a data centers that are remotely located in order to have quick disaster recovery or business continuity.

Advantages of Co-location:

  1. Reduced initial cost
  2. Enhanced security features
  3. No need to concentrate on the upgrade and technology changes.
  4. Can have access to a variety of service providers
  5. Faster time to market
  6. Can shrink or grow based on company needs

Some businesses might opt to build and maintain their own data centers and others consider leasing

third party data center. Start-up, small and medium sized organizations opt to lease data centers which are more cost effective and more secure rather than building a new data center.

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