Building the business case for Phase 1 of Hybrid IT

ICT decision makers used to have a choice. “Do we need to house our own infrastructure, or would we be better co-locating it in an external data centre facility?” There were many factors in making this choice: pros and cons of the different models, as well as unique business imperatives and even the ‘sentimental’ reasoning of the ICT team that their equipment should remain at arm’s reach.

But let’s focus purely on the financial data, and we’ll see that the choice is increasingly clear cut: tomorrow’s digital, cloud and data analytics initiatives are best supported within world-class dedicated data centres.

What was the choice?

You had two main options for housing your key data storage and processing infrastructure. Either locate it in private, in-house facilities or co-locate it within a purpose-built data centre facility. Unless they were ‘born digital’, most organisations currently hold the majority of their ICT infrastructure in-house. So why are increasing numbers moving it out?

Good reasons for placing specific components of your infrastructure within a dedicated external data centre facility include:

  • Reducing the risk of relying entirely on your own network and data centre infrastructure, for the resilience of your mission-critical operational processing
  • Further reducing business risk through Disaster Recovery and Business Continuity: having data and systems in multiple locations
  • Meeting the demand for high performance computing – when your internal data centre has insufficient power or rack density to support new technologies without a significant (and costly) upgrade
  • Optimising internet connectivity – especially for webserver/website hosting and eCommerce transaction processing

Data analytics and big data – again at the top of the CIO’s agenda, according to Gartner – are also key drivers. Both demand high levels of scalable processing power and data storage. Collecting this data also calls for resilient, high-speed network access – as does the distribution of the information and intelligence that results from its processing to support real-time reporting and decision support.

Establishing the TCO of in-house versus co-location

To fully understand the real costs of supporting your own in-house data centre, you need to look at more than just the costs of the racks your equipment is placed in. Leasing data centre space can help avoid these and other costs of managing your own facilities.

Real Estate Costs

Unless you’re a mega organisation with your own dedicated remote data centres, it’s likely that they’re sited on your premises. This means you’re locating your critical ICT resources at the same location as your employees – and paying a premium in real estate for doing so.

Power & Cooling Costs

World-class data centres have the economies of scale to leverage the latest in cooling and power technology, and the sophisticated architectures to radically reduce power usage. Unless you’ve recently fitted these technologies in-house, it’s likely that you’re paying far more for power than you need to. Whether or not your organisation subscribes to green principles, the amount of power your ICT infrastructure uses is likely to be accounting for the majority of your power bills, depending on your industry.

Connectivity Costs

In a cloud-centric world, connecting data to the ecosystem becomes a significant cost. This is another way you can leverage the economies of scale of a dedicated facility. In a well-connected data centre, you will find high-speed, resilient links to the internet services you need – taking some of the burden from your own enterprise network links.

People & Security Costs

Managing data centre facilities requires a pool of specific skills and specific roles. Protecting them calls for highly complex physical and digital security systems. If managing and securing data centres are not your core business, why would you want to expend resources on these services?

The Costs of Capital & Change

In addition to the operational costs, an in-house data centre represents a significant capital investment. As your business changes, so too does your need for data centre space. Your internal data centre could run out of space. Alternatively, consolidation of your servers and storage could leave it half empty – and using more real estate and energy than it needs to. Again, you can leave the issues of scalability to a service provider whose core business it is!

Making the right decision for your business

Of course, where you locate your ICT infrastructure is not just a financial decision. If you are planning any ICT initiative that involves heavy-duty data collection, analysis, real-time reporting and storage, then there are reasons why renting space in one or more secure, purpose-built Australian data centres is even more compelling:

  • High availability access to systems and data: Both for your users, wherever they work, and between SaaS, web services and other systems within your ICT ecosystem
  • Resilience: Both of the conditions your ICT infrastructure is operating within, as well as its connection to your users and the wider world
  • Risk and compliance: Which, as well as Disaster Recovery provisions, includes the security and sovereignty of your data
  • Business agility: The scalability and flexibility to grow, and to only pay for what you need, when and as you need it

If you’d like to learn more about the implications, read our Data Centre Buyers’ Guide. Or contact us to discuss your specific situation with one of our experienced DC experts.