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How Outsourcing Data Center Operations Can Boost Your Business?

Published on 11 July 15
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Many reports have often suggested that 99% of businesses fail in the first two quarters because of ill planning and lack of visibility. Surprisingly, businesses donât fail when they have a dearth of work; businesses face a nose dive when they start growing! Yes, itâs the growth that companies are unable to manage and they lose their brand value before building a brand of their own. Can say, death via negative branding!

Now if we look deeper into the cause â effect equation, this failure happens because most the companies, during the inception mode, try to do everything on their own (both core and non-core operations). As they scale up, they are unable to manage the non-core, time consuming elements stunting seamless business service. These issues of not prioritizing operational elements take the growing organizations from sunlight to darkest ally of spiral failures.

One of the elements (unless it is the core operations of an organization) that takes up a lot of time for any growing organization is managing the data and data related services. Every business today leverages IT in one way or the other. IT is no more an enabler but a close partner for every business. Today, a CTO sits next to CEO when it comes to formulating innovative strategies.

According to a recent survey of Fortune 500 companies by Forbes, most IT leaders evaluate and implement the option of outsourced data centers over in-house operation.

So what are top 5 reasons companies choose to outsource their operations to datacenter and at times, dedicated server hosting:

Reason 1: Guaranteed Uptime, every time!

It is important to note that outsourced datacenter services come with a sheer responsibility of services providers. The services are governed by service level agreements (SLAs) that held service providers answerable for all the environmental and infrastructure elements. The SLAs include unsaid commitments to state-of-the-art building systems and designs, maintained at the industry best standards level to reduce downtime and subsequent financial penalties.

According to Gartner, the average recovery time for total data center outage is 134 minutes which no startup business running its own datacenter can commit. Outsourcing thus becomes the best option.

Reason 2 âLow on CapEx, Boosts Branding!

Data center outsourcing has been a prominent choice of startup and growing businesses as it gives leverage of moving the high CapEx requirement to low OpEx. This indeed comes with flexibility to expand the need at any hour of the day/ night ensuring consistent business value delivery.

CapEX to OpEX, agreed! How it effects branding? Rather how it boosts branding?

With adoption of world class data center services, in fact dedicated hosting; your clients are assured of your sound decision making. This doesnât end here as you may also attract investor confidence and higher motivation of employees in your growth plans. A well thought-out service level agreement and outsourcing partnership, one can assure long-term solid foundation for futuristic growth plans for the business.

Reason 3 - Creating Distances for Risk Mitigation

Data center helps companies to mitigate by ensuring adequate distance between a companyâs headquarters and its production data center. Uncertain business disruptive events such as utility blackout or the occurrence of a natural disaster can be mitigated in comparatively small turnaround time. It is though important to take into account the latency in response for applications in the data center and between. No wonder we are seeing smaller and robust data center hubs and colocation facilities in key markets catering high quality inventory to mitigate risks.

Reason 4 - Increased Focus, core business!

Building a new datacenter or upgrading an existing is not an easy task and can take anywhere up to 2 years or more. The business agility definitely gets impact as a critical amount of resources is being spent to build up a data center/ dedicated hosting. This doesnât end here and despite building a state-of-art data center, business heads may end up scratching heads to deal with under-utilization of capacities of in-house datacenters. When it comes to an outsourced data center model, the troubles of upgrading IT infrastructure and building systems are shifted to the outsourced data service provider. Enabling the CIOs and IT managers focus more on important activities contributing to business goals.

Reason 5 - Regulatory Compliance and Audits, all managed!

With industry standards upgrading very often, there has been a constant increase in technical and regulatory pressures impacting business infrastructure in most organizations. Outsourced data center model ensures compliance and audit capabilities to meet the SSAE16 standards, the health insurance portability and accountability act (HIPAA) and many other government regulations. It is very difficult for a growing company to invest and maintain these standards (where it would need to employ dedicated staff for regulatory control management).

So, where are we heading?

As per Gartner report published early this year, the data center outsourcing market in India is growing at a rate of 25-30%. With this, the third party data center is expected to grow at a rate of 80% in the coming years. Innovative business ideas may want to take utmost advantage of dynamic market environment. In such scenarios, improved connectivity and latency are two key elements for growth. Datacenters are an answer to this growing need!



Many reports have often suggested that 99% of businesses fail in the first two quarters because of ill planning and lack of visibility. Surprisingly, businesses donât fail when they have a dearth of work; businesses face a nose dive when they start growing! Yes, itâs the growth that companies are unable to manage and they lose their brand value before building a brand of their own. Can say, death via negative branding!

Now if we look deeper into the cause â effect equation, this failure happens because most the companies, during the inception mode, try to do everything on their own (both core and non-core operations). As they scale up, they are unable to manage the non-core, time consuming elements stunting seamless business service. These issues of not prioritizing operational elements take the growing organizations from sunlight to darkest ally of spiral failures.

One of the elements (unless it is the core operations of an organization) that takes up a lot of time for any growing organization is managing the data and data related services. Every business today leverages IT in one way or the other. IT is no more an enabler but a close partner for every business. Today, a CTO sits next to CEO when it comes to formulating innovative strategies.

According to a recent survey of Fortune 500 companies by Forbes, most IT leaders evaluate and implement the option of outsourced data centers over in-house operation.

So what are top 5 reasons companies choose to outsource their operations to datacenter and at times, dedicated server hosting:

Reason 1: Guaranteed Uptime, every time!

It is important to note that outsourced datacenter services come with a sheer responsibility of services providers. The services are governed by service level agreements (SLAs) that held service providers answerable for all the environmental and infrastructure elements. The SLAs include unsaid commitments to state-of-the-art building systems and designs, maintained at the industry best standards level to reduce downtime and subsequent financial penalties.

According to Gartner, the average recovery time for total data center outage is 134 minutes which no startup business running its own datacenter can commit. Outsourcing thus becomes the best option.

Reason 2 âLow on CapEx, Boosts Branding!

Data center outsourcing has been a prominent choice of startup and growing businesses as it gives leverage of moving the high CapEx requirement to low OpEx. This indeed comes with flexibility to expand the need at any hour of the day/ night ensuring consistent business value delivery.

CapEX to OpEX, agreed! How it effects branding? Rather how it boosts branding?

With adoption of world class data center services, in fact dedicated hosting; your clients are assured of your sound decision making. This doesnât end here as you may also attract investor confidence and higher motivation of employees in your growth plans. A well thought-out service level agreement and outsourcing partnership, one can assure long-term solid foundation for futuristic growth plans for the business.



Reason 3 - Creating Distances for Risk Mitigation

Data center helps companies to mitigate by ensuring adequate distance between a companyâs headquarters and its production data center. Uncertain business disruptive events such as utility blackout or the occurrence of a natural disaster can be mitigated in comparatively small turnaround time. It is though important to take into account the latency in response for applications in the data center and between. No wonder we are seeing smaller and robust data center hubs and colocation facilities in key markets catering high quality inventory to mitigate risks.



Reason 4 - Increased Focus, core business!

Building a new datacenter or upgrading an existing is not an easy task and can take anywhere up to 2 years or more. The business agility definitely gets impact as a critical amount of resources is being spent to build up a data center/ dedicated hosting. This doesnât end here and despite building a state-of-art data center, business heads may end up scratching heads to deal with under-utilization of capacities of in-house datacenters. When it comes to an outsourced data center model, the troubles of upgrading IT infrastructure and building systems are shifted to the outsourced data service provider. Enabling the CIOs and IT managers focus more on important activities contributing to business goals.

Reason 5 - Regulatory Compliance and Audits, all managed!

With industry standards upgrading very often, there has been a constant increase in technical and regulatory pressures impacting business infrastructure in most organizations. Outsourced data center model ensures compliance and audit capabilities to meet the SSAE16 standards, the health insurance portability and accountability act (HIPAA) and many other government regulations. It is very difficult for a growing company to invest and maintain these standards (where it would need to employ dedicated staff for regulatory control management).



So, where are we heading?

As per Gartner report published early this year, the data center outsourcing market in India is growing at a rate of 25-30%. With this, the third party data center is expected to grow at a rate of 80% in the coming years. Innovative business ideas may want to take utmost advantage of dynamic market environment. In such scenarios, improved connectivity and latency are two key elements for growth. Datacenters are an answer to this growing need!

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