Top 6 Factors to Consider When Making A Data Center or Colocation Purchase

Key Data Center Decision – Lease or Build Your Next Facility

Outsourcing IT requirements to a third party can be a bit overwhelming given the on-going business requirements, obscure contract terms, different pricing methods, and fixed and variable costs to consider.

Below is a list of key considerations to understand when deciding whether to build versus lease space for your IT infrastructure.

1. Control

Control is the most common factor driving organizations to a “build” decision. Enterprises have an intimate familiarity with their unique data requirements and want to retain control of operations, economics, location and design.

However, top providers can address each of these concerns individually to provide a holistic solution, as well as provide secure access to equipment. Your data center decision should be treated as an interview process. Prepare a list of key priorities and ensure the provider has an answer that meets your requirements.

2. Time to Market

While data migration is an exercise requiring careful planning, it is nearly always a faster solution than a building an in-house data center. Deadlines under 12 months will rarely be met if a firm must build a solution in-house.

Leasing enables data to move into a ready environment. Even if the full migration needs to happen gradually, the initial expansion requirements can be addressed in near real time.

3. Financing

Capital expense budgets seem to continuously shrink in many cases, so outsourcing can provide implicit financing. By leasing space, you only pay for operating costs, thereby avoiding the steep upfront investment of building a new facility.

Off balance sheet financing could also be very attractive for your company. Consider bringing up the discussion to shift capex to opex with your finance group. Look at long-term costs of leasing versus the upfront cost of building as well as ongoing power costs, staffing, and unused capacity. Build a financial case for both building and leasing to determine which options makes the most economic sense for the long-term.

4. Scalability

Growing server workloads can seriously impact IT operations. Increases in workloads can require firms to double on-premises storage over a short period of time. And, it is nearly impossible to forecast data center needs over a five to ten-year period. This inability to accurately forecast can lead to over-building which results in wasted capital across infrastructure, power, and staffing costs.

Leasing enables your firm to grow into a solution without extensive upfront costs. Discuss your future needs with the potential provider and ensure the data center you choose is able to scale and deliver the flexibility your business requires.

5. Economies of Scale

If you’re only looking to place 5 or 6 Megawatts of critical load, the economies of scale that colocation and wholesale data centers can leverage for your company are significant. Not only do firms share in the largely fixed costs of staffing, security, and management, but they also save money through shared infrastructure, utility and maintenance costs.

6. Expertise

Most organizations don’t have the experience or the resources to have a staff of dedicated data center professionals available 24/7/365. An in-house data center often becomes a burden to IT staff tasked with other core business functions in their job descriptions. If you do decide to build, ensure you have the resources dedicated to prevent outages, protecting critical data, and keeping abreast of the latest data center technologies.

If your firm needs help in leasing data center space for your current and future needs, the experts at Citadel can help you get an enterprise-level solution at the lowest possible rate in the market. Call Citadel today for a free quote.

Share this