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Data Center Excess

November 15, 2013

You can never have too many data centers. Well, actually you can, and it’s not good for business.  In a recently released report, Gartner Inc. noted that business expansion has led many multinational companies to have too many data centers. As a result, these organizations are dealing with excessive capital and operational costs, complex architecture and, in many cases, an inability to respond quickly to business changes.

What’s the solution? Gartner’s recommendation is for global organizations to employ a dual data center strategy, which means streamlining or consolidating so that they have only two data centers per continent where they do business.

There are many benefits to this approach, from creating operational efficiencies across global workforces to reducing latency between sites. It can also stop application sprawl and create opportunities to save on global service contracts. Bottom line: it can save money.

However, it’s not the only option.  It may make sense for global corporations to get out of the data center business. They can continue to own their IT assets but rely on a third-party data center to provide the physical space, power and cooling and even some of the management. With fewer real estate holdings, utility bills and staffing requirements, the savings can be significant.

The cloud may be an even better bet.  Global companies can benefit from the cloud for the same reasons as smaller organizations — greater flexibility and cost savings, resiliency in the event of natural disasters and the ability to try new technologies without having to commit to them. In addition, the use of the cloud or a third-party data center allows organizations to reassign IT staff from mundane maintenance tasks to efforts that could directly affect business performance, such as developing new applications needed by their companies to compete more effectively.

Many cloud service providers also offer high-level security protocols and technologies to help negate the concerns companies have about security. Corporations can be protected by security best practices without having to continually invest in them and keep the updated.

There is also the matter of compliance. Most multinational organizations are subject to a number of regulatory requirements including PCI DSS and HIPAA/HITECH. Outsourcing to a cloud provider that is audited and/or audit-ready can help them to meet these requirements.  Safe Harbor certification, enforced by the U.S. Federal Trade Commission and Department of Transportation, will be of particular importance to global companies that need to adhere to the highest levels of privacy protection as set forth by the European Union (EU).

The cloud and third-party data centers may never completely supplant traditional data centers run by multinational corporations, but they do offer opportunities for companies to slash costs and expand their business operations without maintaining excessive data center square footage.

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About Peak 10

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Board Member, Peak 10 + ViaWest