Data Center Build Or Buy
Whether your company is small or large, you have a data center. This could be a closet with one server and a router or a giant complex with thousands of servers and routers. After your second power outage or unplanned event, you will look at the equipment in the data center and wonder “why is this data center on-premise and why is this not outsourced?” This will start the proverbial build vs. buy model for a data center.
The current market for outsourced data centers ranges from “direct to business” to “reseller to business”. Direct to Business includes providers like Equinix , Digital Realty, and Internap. You can call these companies directly to order space for your data center. Resellers are often one or two person companies that buy the space from the data center providers like Equinix, Digital Realty and Internap and resell it. Examples include, Vazata and MMG Holdings.
According to the investment recently made by KKR, there is room for more data center companies in the market. Recently KKR invested in data centers. “KKR COMMITS $1 BILLION TO FORM DATA CENTER PLATFORM GLOBAL TECHNICAL REALTY”. One would think that the bankruptcy filing by Internap would start to show a slow down in data center growth but this investment from KKR runs contrary to the Internap experience. This continued growth gives you options to build or buy your next data center.
The building of a data center is a complex process that includes the construction of the data center and then the actual migration to the new data center. This will be a multi-year effort with the usual construction risks and permitting process. The Social Security Administration embarked on a data center build-out that took six years. See the article titled: Social Security Finally Gets Shiny New (and Huge) Maryland Data Center.
If you are finally fed up from managing your data center and all of the electricians, cabling vendors, and HVAC just to keep the floor space you will embark on the decision to build or buy your next data center. If you choose to build your data center, you will need to understand the construction aspect and you will need to know all of the security and environmental components that are needed for a data center. Environmental items will include perimeter fencing, security cameras, man traps and preventing somebody from digging under the data center and “coming up through the floor” to steal data. You need to know every item that is in the NIST and SOC-2 standards. If you are not ready to embark on building the data center you can embark on purchasing the space from a variety of vendors.
In selecting the data center, your criteria must start with the security aspects and SOC-2 compliance. The security aspects will be important as you will often need to demonstrate to future customers the security of the data center. If you choose a facility that has a lower security model and corresponding price point, be prepared for a discussion with future customers about the security of your data center.
In my previous life, I once purchased data center space in Waltham, MA. When the auditor from American Express showed up, he walked through the “Secure” front door with a man trap, and straight out the “back door” of the facility which was a single entrance to the outside world. Needless to say we spent hours on the security aspects of this data center.
In selecting your data center, you need to select a facility that is geographically distant from your primary facility. Hurricane Sandy taught a lot of companies that a data center located a mere hundred miles apart is impacted by the same storm. In considering the geography, you also need to consider how to get to the facility if airplanes are not available. In 2001, companies had geographically distant data centers but they could not get to the location since airplanes were not flying. If you select a geographically separate location, make sure that you know how you are going to get to the facility if airplanes are not available. The best scenario is to place additional employees near the data center that can perform maintenance and installations as necessary.
If building a data center or purchasing one is not a task that you want to undertake, then you can look at the cloud offerings from Microsoft, Amazon, IBM, and other cloud providers. Regardless, as KKR must know, the growth in cloud will continue and they are betting on this growth.