7 Key Factors Behind Data Centre Outsourcing

Data center outsourcing has really cemented itself all over the planet as a viable alternative to the demands of building and managing an in-house data center facility. Recent research results bear this out quite clearly. A study undertaken by a reputable firm last month predicts that the global market for colocation data center services should grow from $30.9 billion in 2016 to approximately $54.8 billion by 2020. Obviously there are factors driving organizations to outsource their data centers to professional colocation partners, but what are those factors exactly?

Here at 4GoodHosting, we understand that part of being a Canadian web hosting provider at the forefront of the industry means being receptive and adaptive to trends in web hosting. This is certainly one of them, and it thus hasn’t gone unnoticed here. We think it’s one that may be helpful for those with big data accommodation needs of their own and a need to understand where they’ll get the most bang for their buck.

Getting back to that study, the Americas as a segment is expected to grow from nearly $16.8 billion in 2016 to $26.4 billion by 2020, with the period of 2016 to 2020 seeing in the vicinity of a 12% cumulative annual growth rate. Asia-Pacific is expected to grow from $5.4 billion in 2016 to $13.2 billion by 2020, at a much higher CAGR of 25.0% for the same time period (2016-2020).

Not surprisingly, cost has always been a big factor behind data center outsourcing and it will remain a key element driving the outsourcing of data centers to colocation providers. We also have the fact that customers are concentrating more and more on the value of the colocation services being provided, as well as the appeal of being able to reduce certain risks.

Here are the five top reasons pushing ever greater numbers of customers to outsource their data center operations these days:

  1. Cost

CIOs for some time now have been under constant pressure to reduce all costs associated with IT operations, and – again not surprisingly – running an in-house data center is decidedly expensive. There’s not getting around it. The level of investment required to deploy and maintain modern, energy-efficient data center infrastructure is substantial, and therefore colocating IT infrastructure in a professionally managed data center facilities is an attractive cost-saving alternative.

  1. Cloud Connectivity

Cloud services have grown massively in popularity over recent years. Public cloud providers like Amazon AWS, Google Cloud Platform, Microsoft Azure, IBM Cloud and Alibaba Cloud continue to be very much in demand, and that’s in large part because the public cloud offers real flexibility and is a fantastic resource for enterprises and others with dynamic IT operations.

Tempering expectations somewhat, it’s quite clear that the majority of users will still need a combination of in-house IT and (public) cloud providers. Connectivity towards those cloud providers is going to be a primary priority for enterprise-grade business operations. Further, outsourcing in-house data center infrastructure to the right colocation data center also works out to mean better access to high speeds and reliable connectivity. The cloud-enabled connectivity providers located in colocation data centers tend to offer high levels of performance, reliability and scalability, all at a more attractive price point in comparison to in-house data center operations.

  1. Compliance

Those same CIOs also need to comply with a host of government and market regulations these days, including PCI-DSS, ISAE, and others. Having sufficiently knowledgeable staff with the needed skills and compliance expertise can be a real challenge, but a good number of the colocation data center providers operating on a worldwide level have been 3rd party audited and / or regulatory certified to confirm their ability to comply.

  1. Reducing Risks

Been told it is difficult to access your in-house data center? Not uncommon at all. Colocation data center providers are often able to offer advanced security layers that match the latest security and compliance requirements. Notable among these security measures are biometric scanning, video surveillance, alarm systems, mantraps, and personnel onsite 24/7. In short, organizations are more thoroughly equipped to secure their company data. Which, more often than not, is their most valuable asset.

  1. Capacity/Flexibility

With an in-house data center, companies may fail to be able to respond to changing capacity requirements, and this might restrict or even hamper organizational goals. Outsourcing data center operations to a colocation provider who has all the ample floor space to grow and be flexible in their contracts lets you manage your data center operations dynamically and the easily scale your operations up and down as dictated.

  1. Expertise Shortage

Running a modern, energy-efficient data center with low Power Usage Effectiveness (PUE) figures is more of a challenge all the time. A little more than a decade ago one could operate a data center without much in the way of to-do or must have. Get yourself a hall, some racks, and power and compressor cooling and you were pretty much good to go. Nowadays, data center operators are all pioneering to get the lowest and most energy-efficient PUE-levels, as the cost of current has become a forefront consideration for data center operations. Modular deployments to keep things flexible and cloud-enabled are more important now too.

Long story short – companies outsourcing their data center services may benefit from having access to more sophisticated data center infrastructure than their budgets would allow otherwise. Lastly, it’s natural that CIOs like to free up IT staff and lower their in-house data center costs by outsourcing core data center operations to external data centers as well as cloud providers.

  1. Uptime Guarantee

Data centre outages can be painfully costly. Professional data center providers are capable of operating state-of-the-art facilities that sport sophisticated backup systems to keep things running, even if an outage occurs. Most data center providers will also be able to extend Service Level Agreements (SLAs) that guarantee high levels of availability.

Not having to worry about the technical aspects of data center and IT infrastructure uptime, along with being able to reassured of the low risk of downtime promotes more focusing on accomplishing corporate goals, applications and supporting the business.

Cost reduction may be the big initiator, but there’s much more to this trend. Compliance, improved resilience/uptime, cloud connectivity, scalabilty and flexibility, expertise shortage, and reducing risks are promoting the growth of colocation data centres too. Keeping data center operations in-house may continue to work for some, but if you’re even just starting to see that your needs have changed then it makes sense to take the bull by the horns and get it done sooner rather than later.

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