Should you build, lease or outsource your data center?
Five years ago, the prevailing wisdom was that, given a choice between building a new data center and using a hosted service, the former option was the smarter move. Even Gartner favored this approach, stating that the cost of renting rack space in a hosted data center was doubling every two years.Quite a bit has changed since then, including the maturation of outsourced offerings from public and private cloud providers. These offerings present another viable option for IT solution providers to consider. When deciding which model is right for your business, keep the following three factors in mind.
To operate your own data center, you need to consider not only the amount of time required to operate and maintain the facility, but the time required to manage the infrastructure, applications, and data. In most cases, MSPs need to assign one or more employees to management tasks. In addition, they may need to hire more employees to oversee the physical environment and ensure that all machines are running properly.
The big question is: Are you making more money by paying a technician to manage your data center, or could that person bring in more revenue for your business performing billable activities for your customers? MSPmentor’s latest research suggests most IT service providers are opting out of running their own data centers because that allows them to apply technical resources to more profitable tasks.
A common error that MSPs make when comparing data center options is to focus only on the cost of managing data and servers. If you decide to either build your own or lease space in a co-location facility, you also need to consider the cost of running that facility, including bandwidth and cooling costs. If employees are going to drive between your corporate office and the data center facility, those costs need to be taken into account as well.
Other commonly overlooked costs include hardware refreshes, which need to be performed on a regular basis, and equipment depreciation as an element in long-term budget planning.
Next, think about the cost of additional backups for your customers’ data. How much is it going to cost if you need to increase capacity for additional backup sets? Say you have a handful of customers with 10 terabytes of data. Are you prepared to support this amount of data? Not to mention, is all the data mirrored to additional facilities for redundancy?
If your customers are in regulated industries such as health care, finance or retail, you’ll need to ensure your data center complies with industry regulations. This will likely entail hiring someone who’s an expert in compliance standards, and you’ll need to go through outsourced compliance audits.
Keep in mind that many regulations require data to be stored in a particular way and secured using specific procedures. For example, HIPAA requires data to be encrypted at rest and in transit to the cloud. It also requires SSL (Secure Socket Layer) procedures be used to grant web access to the data.
Since compliance involves both expertise and the ability to implement specific solutions, you may be surprised to find that outsourcing these services to a trusted third-party cloud provider is actually the easier — and more profitable — solution in the long run.
Before you decide to build your own data center or lease space in a co-location facility, be sure to consider the time commitment, costs and compliance requirements that go along with these options. Your research should lead you to the solution that helps you provide the best service to your clients.
By Chris Crellin, Senior Director of Product Management for Intronis
Senior Director of Product Management Chris Crellin leads product strategy and management for Intronis. Over the past 15 years, Chris has developed a strong record of successfully developing product strategy and driving execution from concept to delivery. Chris joined Intronis from Backupify/Datto, Inc., where he was responsible for product strategy and execution of their cloud backup SaaS portfolio. Prior to Datto, he spent 14 years with RSA, the Security Division of EMC. He was the lead product manager for the RSA SecurID portfolio after having started his career as a software engineer.
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