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— Blog

The hidden costs lurking within the corporate data centre

November 4, 2014
By: Peter Wolsey, Director of Corporate Development, Australia

In the not-too-distant past, having a room packed with computer servers as part of the average office fit out was considered normal practice. Yet, all too often, scant attention was given to the actual cost of taking such an approach to IT delivery.

Hidden costs abound in such office-based computer rooms. These range from the rental charges for occupied floor space to the cost of expansion or future relocation of equipment.

One of the biggest costs is power. High-density racks of servers and storage arrays consume large amounts of electricity. Feeding this demand can be beyond the typical wiring of an office building, requiring expensive workarounds for tenants.

Then there’s cooling. Office air conditioning systems were never designed to cope with the heat output from server racks and so complex upgrades are often needed to keep things humming.

Thirdly, there’s connectivity. High-speed data links are essential, yet access to these (and especially redundant alternatives) can be difficult, expensive, or both in an office building.

The bottom line is that the typical office building was never designed to house a data centre – it just seemed like a good idea as computers spread throughout the business world during the 1980s and 90s.

One way to calculate the true total cost of occupancy of an in-house data centre is to use a comprehensive cost classification system such as the International Total Occupancy Cost Code (ITOCC). Formulated by UK-based IPD, the code captures both the capital and operating costs of real estate occupancy. Using the ITOCC and adapting where necessary, it is possible to compare the cost of keeping servers within an office environment, building a dedicated data centre, or relocating equipment into a purpose-built and managed facility.

Interestingly, the ITOCC results show the total cost of running an in-house data centre can be more than double that of using an external, purpose-built, managed facility. I recently wrote a white paper which clearly explains this analysis.

While the operational expense differential is significant, there are other indirect costs that also need to be added to the equation. Examining these costs makes the case for using a dedicated facility even more compelling.

One is risk mitigation. Purpose-built data centres have been designed from the ground up to provide security and reliability. Factors include geographical location, building design and access controls. Having these elements in place significantly reduces the likelihood of outages which can, in turn, have a dramatic impact on an organisation’s bottom line.

A second factor is having room to grow. Where an in-house facility can be constrained due to lack of floor space, specialist data centre operators plan for the long term. Scalability and availability of space and power are offered by data centre operators, giving client companies the flexibility they need to expand their computing resources without having to shift equipment to new locations or pay for extra office space.

A third – and often forgotten – factor is regulatory compliance. Corporate data and transmission is increasingly falling under the regulation of governments, and meeting strict compliance rules can be difficult when data is housed in an office environment. Using an external facility that complies with applicable regulatory laws can make the process significantly easier.

There are clearly a range of quantitative and qualitative benefits associated with using a dedicated data centre rather than continuing to operate an in-house facility. It’s only through the careful assessment of each alternative that they become clear.

Your in-house data centre may have served your organisation faithfully for many years, but, like so many other things in the business world, times are quickly changing. It may be time for a second look.