The Ins and Outs of Building and Scaling a Data Center

Building or scaling a data center is no small undertaking – in fact, building one from scratch could be the largest project a company ever undertakes. A data center is a facility used for data computing, processing, and storage, so all businesses need one. The facility includes high-performance servers, storage devices, virtualization and networking solutions that support enterprise computing needs. In addition to the equipment, a data center requires powering and cooling solutions to help optimize the performance of networking components.

Besides building your own data center, you also have the option of outsourcing to a data center service  provider that delivers services to enterprises and end users on demand, or co-locating an existing data center, which means using a hosted data center solution as a backup to their primary facility when a company grows and needs more computing resources. Deciding which route to take will depend on the type of business and what its needs are.

Building or scaling a data center is no small undertaking – in fact, building one from scratch could be the largest project a company ever undertakes. A data center is a facility used for data computing, processing, and storage, so all businesses need one. The facility includes high-performance servers, storage devices, virtualization and networking solutions that support enterprise computing needs.

In addition to the equipment, a data center requires powering and cooling solutions to help optimize the performance of networking components.

Besides building your own data center, you also have the option of outsourcing to a data center service provider that delivers services to enterprises and end-users on demand, or co-locating an existing data center, which means using a hosted data center solution as a backup to their primary facility when a company grows and needs more computing resources. Deciding which route to take will depend on the type of business and what its needs are.

“It’s like choosing between buying a new car or leasing – business needs should drive these decisions,” says Steven Hill, senior analyst, Data Center Solutions, at Current Analysis. A lot will depend on the business sector you’re in, since financial services, health care and government will have regulatory and compliance requirements to contend with. It will also depend on how much space your business has available. Building or expanding an existing data center is not as much of an issue in Midwest as opposed to the east coast, from a real estate and power consumption perspective, Hill notes.

“It really depends on your level of risk tolerance,’’ adds Zeus Kerravala, principal analyst at ZK Research. “If you’re in a heavily regulated industry like financial services and health care and need a lot of custom processes so you can pull data when you need it and do things in a customized way you should run your own” data center internally. “Companies with standardized processes that can replicate things over and over can outsource.”

But keep in mind that “Anytime you introduce a third party there is some risk,” Kerravala says. On the other hand, he has seen instances where organizations think of themselves as very secure with well-defined processes, but then they discover that a services provider has better defined processes. “If a third party has better processes and security,’’ he says, “maybe it’s time to look at outsourcing.”

“There are still extremely good reasons to build a data center yourself: absolute physical and technical control over that environment as opposed to entrusting it to someone else,’’ says Hill. “If there is a problem you walk into the data center and deal with it, but on the other hand, if you have a problem you have to deal with it. There is no one to fall back on.’’

When you opt to build or scale an existing data center there are also substantial cooling and power considerations as well as needs for enhanced security and fire prevention, says Hill. “The list goes on and on. It always has to be dealt with on a case-by-case basis.”

The Staffing Component

Deciding which direction to take will also depend on your level of skilled personnel. While finding people with right networking, server and storage skills isn’t that difficult, Kerravala, says finding people with more “visionary skills” as the trend toward software-defined data centers (SDDC) grows, is.

“Companies are reticent to pay these people so if you have the people make sure you keep them” and provide them with training in new skills, he says. “The world is changing — it’s moving to cloud and software-defined.” Software-defined data centers are when all the elements of an infrastructure, such as the networking, storage, security and CPU are virtualized and delivered as a service. Virtualization refers to when a server, storage or networking device or operating system is delivered as something virtual, through a software translation layer, or “abstraction layer,” rather than physical.

A lot of people who have been in IT people for a long time don’t want to make changes, says Kerravala, noting that it was a struggle for IT when during the transition from mainframe to client server. “So all the young guys coming up from school today are learning how to run virtualized environment and software-defined. IT is always resistant to change, but it’s important for them to change for their own career protection as well.”

What Are My Options?

Historically, as larger corporations built out their data center requirements they had to do it internally because there were no other choices, says Hill. In the 1980s and ‘90s there weren’t many companies that specialized in leased data center services, especially in smaller cities. “If you needed computer technology, you had no choice but to build your own data center and put your systems in it,’’ he observes. “Now with more commoditized IT technology as well as the cloud, there are a lot more options and people can pick and choose between owning and leasing practically anything.”

This can be ideal if you’re a startup or a smaller company and don’t want the capital expenditure of building a data center. Many companies today also use colocation when they “physically have enough equipment in two locations to provide business continuity,’’ says Hill. Some companies may be required to have a co-located facility to meet corporate governance policies or to be in compliance with regulatory requirements and in some cases, they need to be geographically separated by over 1,000 miles away, he says.

The benefit of using either a cloud-based solution or colocation is that both reside in separate physical locations, but with colocation, “your equipment at other the location can be locked and reserved for your use — no one else uses it,’’ emphasizes Hill. “You can also purchase managed services, which means there will be people at the other location that are available as hired guns, so if something goes wrong at an offsite data center, your service contract insures that whenever there is a problem they go in and fix it to maintain your service level agreement.”

John Burke, principal research analyst and CIO at research and advisory firm Nemertes, says there has been “a long, slow, steady increase in use of colocation as either a replacement for or supplement to running your own data center from the ground up. The payoff there is you don’t as a company have to be an expert in providing redundant power services to your IT resources; the people who built it can worry about it, and you can worry about [business] issues.”

Burke says he has also seen a plateauing of tradition data center managed services gradually giving way to the use of cloud services from companies like Amazon, Google and Microsoft as the sources.

“The other thing that’s taking the place of old managed services is SaaS [Software as a Service] and instead of paying someone to run your SAP instance, you’re going to get your solution provided as a service, soup to nuts.”

Getting Started

Start the process by doing an analysis of cost versus performance versus resiliency and figure out where you need to come out on that because where it may be most convenient for your company to build could be exceedingly expensive with real estate and utility costs and taxes, advises Burke. Also determine what your disaster recovery needs are and the level of potential downtime your internal or external customers may experience.

“Other things to keep in mind are requirements for redundancy and the extent to which you want to invest in a data center that approaches zero downtime … that again, can get very expensive depending on where you are,’’ Burke notes. Companies need to figure out how many days they can potentially be disconnected from the power grid and how they plan to fuel their generators, he says.

Other questions to consider when building: What will the data center’s lifespan be? What are your legality and compliance issues? Do the services you are hosting need to be in a specific geography?

But, says Burke, “the critical question is why are you building your own data center from scratch in the first place and having a really, really solid answer.”

Carefully weigh the options and consider what the strategic advantages are of each, he advises.

“When considering your data center options, it’s always a balance between business needs, capital cost, growth expectations, data security and staffing requirements,” concludes Hill. “Today there are a vast array of alternatives to building or expanding the traditional data center, and it’s absolutely worth exploring them all before making such a huge investment.”

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