|Recent research shows that for most companies leasing a datacenter facility is more economical thanbuilding and operating one.
Willemstad, Curaçao – December 2, 2014 – In today’s fast evolving business climate, companies rely heavily on the availability, quality and consistency of their IT infrastructures in order to guarantee the continued success of the business.
The traditional approach was to host all IT infrastructure in-house. However, as business expands and demands for additional IT services increases, companies are increasingly faced with the challenge of meeting increased power and cooling demands. As a result, sooner or later they are faced with the critical decision to either lease or (continue to) build-out their own datacenter facility.
Each approach has its own unique benefits and challenges. Building a datacenter provides perceived control over the facility and its operations. On the other hand, leasing a datacenter presents an attractive operational expenditure model with better access to space and power, improved security and the ability to expand faster at a lower cost.
So what is the right decision for your business? We take a look at some recent research to answer this question.
Datacenter facilities are your most expensive investments.
There’s a good chance that your datacenter facility is reaching its limits on space, power and/or cooling capacity. A recent research by Forrester finds that there are three primary drivers behind this: data growth, virtualization and consolidation. Forrester estimates that storage consumes anywhere between 5% and 15% of the total power consumed by the datacenter.
With data growth between 25% and 50% YOY, the explosion of data growth is having a real impact on datacenter capacity. In addition, as companies drive their virtualization deployments to greater densities of virtual machines per physical machine, companies are driven to look for new facilities that can support more extreme densities. Lastly, organizations are consolidating their multitudes of small data repositories and smaller datacenters into centralized regional sites.
However, the decision to build a new datacenter can’t be underestimated, as it will likely be one of your largest infrastructure investments. Many companies don’t fully understand the costs associated with building and operating a datacenter before they commit to this option. Similarly, many companies don’t fully assess the risks that they are potentially shouldering. Before making this big decision, it’s imperative that organizations understand all the options, their pros and cons as well as their risks and costs.
Three factors determine the economics of datacenter facilities
It’s imperative that organizations objectively evaluate the financial impact on their business when considering leasing versus building a datacenter. Three critical factors that ultimately should help to determine your final decision are:
- Benefits – How will your company benefit from leasing versus building a datacenter?
- Costs – How will your company pay for your datacenter facility?
- Risks – How do uncertainties change the total impact of a datacenter on your business?
Let’s take a look on how the key benefits of leasing versus building a datacenter compare.