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Build a Data Center or Collocate? Why Not Both?

by Dave Cappuccio  |  March 24, 2012  |  Comments Off on Build a Data Center or Collocate? Why Not Both?

Data Centers have been an integral part of the enterprise for almost 50 years, but the question of whether we should build more of them, or just let someone else manage them, has been with us since the beginning. And has yet to be resolved. Whenever a data center build project is initiated it seems the first questions that need to be resolved are whether to build, and spend a significant amount of capital in the process, or colocate, thus minimizing the capital spend, but giving up control.

And the answer of course, sad to say, is “it depends”. For those with fairly static workloads – those that are steady state and run at consistent, predictable levels day in, day out, the decision is often an easy one. Colocation provides almost all the benefits of a buildout – a state of the art building, often Tier 3+, reliable infrastructure, more than adequate power and cooling for the foreseeable future, and almost immediate availability. Growth outside of the contracted environment is not an issue for these environments since the applications are predictable.

For enterprises with very active application portfolios, or who experience unplanned M&A activity the colocation decision is a bit more problematic. Identifying the resources needed today, and even projecting needs a year or more out is fairly easy, but newer applications, unplanned business opportunities, or M&A activity can cause dramatic changes in the IT infrastructure needs. For these environments colocation becomes an issue because of the unplanned growth – and the realization that the likelihood of additional space being available within the same facility in a few years is probably negligible, simeply because in order for the provider to maximize their profits they need to lease out the buildings space as fast as possible. It’s possible to lock in growth space, either adjacent to your space, or elsewhere in the building, but at a cost up front – essentially forcing you to pay for unused space. An alternative could be contracting for a right of first refusal clause whereby you would have the option of lock in the last space before it was leased to someone else, but again this would entail paying for unused space well before it was needed.

Another alternative is beginning to be used by enterprises, that of looking at colocation as augmentation space for existing data centers, rather than replacement space. This is evolving in three different forms as follows:

1. Temporary Space. Organizations that find themselves nearing capacity of their data centers but do not have the time, or budget, to build out their final solution right now are using colocation as a temporary stop-gap. Space is leased for a short term contract, perhaps 2 or 3 years, and is used to absorb growth while the new data center is designed and built. The downside of this is that eventually 2 moves are required – first to the colo facility, and then to the final destination, but if planned properly this can cause limited risk to the business. The upside is that it gives an enterprise breathing room to properly plan, design and execute a data center build project.

2. Non-Critical Space: When a robust production data center is nearing capacity a design/build project is a risky business. Not only does a new site need to be prepared with high levels of redundancy, scalability and availability, but the physical move is fraught with risk to day to day operations. Done right these projects take 3 to 4 years and the process of the move is often many times more complex than the construction project itself. In these situations colocation becomes an adjunct to existing data center space – for non critical systems. By moving non-critical or commodity systems (e.g. back office, test/development) to a colocation facility valuable floorspace, power and cooling resources are freed up for future production growth. This is a low risk scenario since the moves are for non-business critical only, and it becomes an operating expense rather than capital expense impact only. Also, due to the non-critical nature of the applications the colocation provider only needs to support a strong Tier 1 or Tier 2 environment, thus lowering the monthly costs.

3. Mission Critical Space: Many data centers today are artifacts of the past and were not designed to support todays high performance systems. These sites were often designed as server rooms or grew organically , adding space from within the building in reaction to growth (vs. planned expansion). As such they either can’t support the power and cooling needed for todays rack based or blade systems, or have inadequate redundancy in the mechanical infrastructure, or both. In these situations companies often are faced with a choice to rebuild/retrofit – which entails significant business risk, or build a new site at a large capital expense. With the current economy the retrofit option has been forced on many IT shops due to reduced budgets and in these instances colocation is becoming a viable short term alternative for production workloads. Moving mission critical work to a more robust colocation facility solves the problem of infrastructure availability and redundancy – and reduces risk to the business, which in turn frees up floor space in the older facility which can then be used as the beginning of a retrofit project. Since the retrofit will not impact non-critical systems it has reduced risk, can be extended over a longer term to spread the capital spend over multiple years. Once completed, a migration of critical systems back to the data center can be accomplished.

The are other variations on this theme, especially when considering business continuity and disaster recovery planning, but the bottom line is that looking at colocation vs. build as an either or decision is no longer a viable way to view your options.

– Posted using BlogPress from my iPad

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Category: food-for-thought  

David J. Cappuccio
Research VP
6 years at Gartner
41 years IT industry

David J. Cappuccio is a managing vice president and chief of research for the Infrastructure teams with Gartner, responsible for research in data center futures, servers, power/cooling, green IT, enterprise management and IT operations. Read Full Bio




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