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Datacenter make or buy ? Build vs. CO-LO

If you need to decide whether you need to build your own datacenter or rent it from a CO-Location provider, there is magnitude of questions that need to be answered.

As a starter I would like to give you some easy guidance.

Are you a startup or small company ? Would you like to defer capital investments to a certain point in time ? Than CO-Location is often a good solution to start with. I call this  the midterm  “path to growth”. Do an RFP and be clear about your requirements. Depending on whether you choose a local provider or a global provider, there is a difference in functionality (e.g. connections between the provider datacenters, Tier level etc.), but also significantly in cost. Expect that you need to sign up a binding contract for a minimum of one, but usually three  years.

If your business plan has uncertainties in regards to growth, you may want to consider a cloud solution to start with in order to pay only what you are using for. If you are supporting a 7x24hour operation and are successfully growing, you will soon get to the point were CO-Location becomes more attractive.

Once  your rented datacenter space reaches a certain size (our business cases show a break even at about 1,5 MW of power consumption of the data center, which depends on the location you choose, PUE factor and power grid provider cost), than you should definitely look into a make option. Why ? Because longterm it is substantially cheaper (factor 2-3), assuming  you keep an eye on efficiency from an facility as well as from an IT perspective.

Should you have contracted or acquired several rented datacenter locations, e.g. because your business entered new markets and countries  that you in IT needed to support, consider consolidation to one location per continent. Todays networks offer good bandwith and acceptable prices. The times that everybody needed his own local datacenter or servers is almost over. Virtual Desktop technologies and network accelerators help to overcome latency and distance issues. The only reason for a second location  on the same continent is a disaster recovery site, that you should plan for, in order to keep your business running under all circumstances, but that’s another story.

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