Digital transformation may seem like an overused term, but ignore it at your peril. Bringing it front of mind again (if it wasn’t already) is the government’s recently released digital strategy, intending to make the UK the “best place to start and grow a digital business” and “help businesses go digital”.
The challenge is that being digital is an ever-evolving state of business activities, processes, competencies and models. Change continues to be the only certainty and technology is always at the centre. Today, it is cloud, mobile, analytics and social media that are influencing the digital landscape.
However, businesses aren’t always quick to implement new technologies. Research conducted by Fujitsu found that aging technology is the major barrier to digital transformation and 57 per cent of the businesses surveyed admitted that existing technology is struggling to keep up with the demands of digitisation. So how can organisations keep pace with the ever-increasing speed of doing business and “go digital”?
The conundrum brings about the classic build vs. buy question that raises its head whenever it’s time to provision for new IT infrastructure, additional capacity, and streamlined operations. The data centre provides the foundation to all things digital so does it make more sense to build a (new) data centre, or buy (lease, or outsource IT needs to a colocation provider)?
Let’s explore the pros and cons of build vs buy…
The most sensible and cost effective solution is to outsource what you can. Businesses going through digital transformation across a variety of industries—from healthcare, to financial services, to retail, and everything in between—are all amassing large quantities of data and evolving capabilities that need rich computing power, robust infrastructure and resilient connectivity.
The main benefit of owning a data centre is control, including access, maintenance and future improvements. But it can also be a drawback; hardware refreshes are required every three to five years and data centre operation may not be a primary competency of the IT department requiring additional staff or at least additional OpEx.
Should an organisation choose to build their own data centre, there is of course the advantage that they can do so to their exact specification and potentially in their ideal location. However, many data centre providers now build their data centres in a modular fashion, and most are in highly optimised locations. The modular approach allows customers to be involved in the design specification and fit out of their space. This level of customer input enables a bought colocation data centre to be flexibly customised almost to the same level as building their own environment, whilst harnessing the expertise of the operator.
Financial flexibility is an important consideration for any data centre deployment, whether it is an internal corporate investment, or outsourced to a third-party provider. Setting up a data centre is hugely capital intensive and building out the facility will often necessitate a provision for growth which in the short-term will make the facility inefficient.
When buying colocation space, most providers will give their customers flexible contracts, with terms that allow for i) the amount of space contracted to shrink or grow depending upon your actual requirements over time; ii) the amount of time the contract runs for, providing ramp up periods for installation, without having to pay full rent until everything is successfully deployed; iii) the amount of power consumed, billing only for power used on a ‘pay as you go’ plan, which maximises budget during times of low or peak usage. These things all help to develop a more predictable expenditure model with costs that increase consistently over the life of the data centre.
Five to ten years ago, it could certainly have been argued building an owned data centre was more secure, but physical, cloud and cyber security have evolved to the point where providers typically have far greater resources to invest in security than an individual company.
More and more enterprises are now adopting a hybrid cloud model for their IT infrastructure and being able to easily reach cloud services is essential. By choosing to colocate in a third-party data centre, customers are naturally in an environment with an abundance of other customers, many of whom will be offering cloud platforms and applications. This creates an ecosystem where customers can benefit from the services that other customers supply. Cloud solutions from providers like Google Cloud, Microsoft or AWS may be just a cross connect away within a premium data centre that provides a cloud access solution, and this ease of access to pubic cloud platforms makes for a very reliable environment.
To support this, most data centres have a good selection of carriers within their facilities who have provisioned extremely dense high quality fibre networks giving customers a wide choice of connections to cloud platforms and beyond. These connections are often 100% reliable, as fail-safe options can be aligned to support any potential outages. For an organisation’s own build data centre, this option is very costly and so they often work with one or two service providers, limiting their reliability and potentially increasing the risk should an issue arise.
Building an in-house data centre is resource-intensive and requires a good bit of experience. The “buy” option provides the best protection against increasing data centre complexity, cost and risk, and eliminates the need to worry about uptime, technology obsolescence and future requirements. It also preserves valuable capital that can be invested in core business initiatives.
Data centre providers commit huge resources to R&D to ensure their facilities are built to the highest level of efficiency. Those who buy outsourced colocation space can be assured that not only is the space and power they are purchasing today future proofed technology it will also provide efficiency for several years into the future, which alleviates the headache and expense of the necessary regular infrastructure upgrades.
The debate about build versus buy has raged for years, but it is returning to front of mind as organisations are spurred on by the government to go digital. The continual hunger for new and improved ways of doing business brings with it the unrelenting need for additional space and power which means modern, efficient infrastructure.
Darren Watkins, managing director of VIRTUS Data Centres
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