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Why Data Centers are Important to Fortune & INC 500 Companies

Published on 22 December 14
Why Data Centers are Important to Fortune & INC 500 Companies - Image 1
In an ever increasingly connected world, the amounts of data being transferred between computers and devices is astounding, and growing at an exponential rate. Each new app, website, video, image, song, etc. is stored somewhere, and the physical place is called a data center.

For large companies, if they’re not leasing wholesale data center space from companies like Equinix or Digital Realty Trust, they’re building and operating their own data centers. Ebay operates a large eCommerce website and rather than leasing wholesale data center space, they have built a world-class colocation data center facility in Utah called the Topaz Data Center. Oracle, Adobe and Microsoft also own and operate their own data centers in Utah.

C7 Data Centers is the largest data center operator in Utah and has leased data center space to large companies whose business may require a secure facility but not be data intensive as large tech companies. In few cases, colocation data centers such as C7’s provides a low cost alternative to leasing wholesale space or building and operating your own data center facility.

Owning and Operating a Data Center
There are many benefits for a Fortune & INC 500 company to own and operate their own data center facility. Here are a few:
Maintain an environmentally friendly corporate culture and company reputation by designing your own data center facility and deciding how and where it gets its power
Added security and control over operational processes and procedures, versus outsourcing those aspects to a wholesale or large colocation data center provider
Leverage a capital expenditure with investing in a data center versus increasing an operational expenditures with leasing space in a data center. Data centers have a high multiple when being purchased, so owning and operating a data center could increase your evaluation.

There are also disadvantages to owning and operating your own data center facility. Among these include:
No SLA. If you outsource to a wholesale or colocation provider you’ll get a Service Level Agreement where you can recoup some losses due to downtime. Since most downtime is due to human error, just because you own and operate your own data center facility it doesn’t mean that you won’t have human error bring you down.

Hi capital expenditure. Data Center facilities typically cost $6MM per conditioned MW of power delivered to the data center floor. For large data centers, such as the 350 East Cermak data center in Chicago who has 104 MW built into the facility, you’re looking at hundreds of millions of dollars to build out a giant data center facility. If your company doesn’t have that capital to make such an investment then wholesale or colocation opex options are more reasonable

Lack of experience. Universities and tech schools are only beginning to train students to become data center professionals so the lack of available talent may mean that you’d have to outsource some data center operations anyways until you can secure that data center talent.

If you are a Fortune or INC 500 company, you may want to consider the cost benefits of owning and operating your own data center facility. While many large tech companies own and operate their own data centers, many other companies opt to lease data center space instead. Primarily, it comes down to available cash and competence. What benefit is it if you own your own data center but can’t find the talent to keep it up 100% of the time? Downtime is any business killer.
This blog is listed under Data Centre Management and Data & Information Management Community

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