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More than just bricks and mortar
Stefan Haase, Divisional Director, Data Cloud Services at InTechnology considers whether businesses should follow Gartner’s advice and build their own data centre or opt for the outsourced model.
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n today’s business climate, cost is king, with many businesses under pressure to reduce overheads and overall IT expenditure. Late last year, Gartner threw a solution into the mix, advising that it was cheaper to build a new data centre from scratch than use a hosted service.
In its assessment, Gartner concluded that hosted services are becoming cost-prohibitive with rack space costs increasing and energy costs spiralling upwards. For the pressure-laden CIO, constructing a data centre gives them an extra avenue to explore. However, it’s important to remember that there is more to owning a data centre than simply assembling bricks and mortar.
Weighing up the pros and cons
In principle, Gartner makes a valid point: building a data centre can often be a cheaper alternative. For some, establishing their own data centre gives them greater control of their operating environment, including access and temperature, for example. In the 1980s and 1990s many banks, utilities and manufacturers commissioned the construction of their own data centres in order to have a local IT site designed to cater for their specific power and storage needs.
However, there are some key criteria that must be qualified before committing to going it alone, not least the total cost of ownership. For example, it’s imperative to establish and understand the full business impact caused by any downtime of business-critical applications and access to business-critical data.
Maintenance
Building a data centre ties up a great deal of working capital in bricks and mortar, but it doesn’t just end there. Upgrades, maintenance, servicing and staffing all require both significant time and investment. Insurance intermediary and InTechnology customer Cullum Capital Ventures (CCV) took the decision to outsource its data for this very reason: to remove the expense of upgrades and maintenance and have a system and infrastructure that ‘just work’ and are reliable. Richard Norris, IT director, CCV explains: “I wanted to move to the
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Cloud because it would enable us to reduce capital expenditure and be more flexible in our operating costs.”
Flexibility is a crucial part of the outsourced model not just from a cost perspective but also in terms of productivity. Organisations don’t need to own their own data centre to operate successfully and need to decide whether they want to become experts in IT as well as their core business. Worrying about 24 x 7 staffing and operations of hardware are distractions from the core mission.
The best third-party data centres on the other hand are constantly upgrading and maintaining the equipment and environment. By focusing on back-end operations, they free up both human and equipment resources that lead to significant bottom-line improvements.
Removed energy costs Energy is the fastest growing cost in the data centre industry, jumping from 12% today to over 20% in the next five
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