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Data Center Refresh: The Build or Buy Conundrum

Organizations planning to build or refresh the data center should consider the build versus buy decision in the planning phase. This decision requires careful examination and evaluation of options involving asset inventories, facility requirement estimations, and a high level budget.

Every step in this process is necessary to gather the information required to make the best decision for the organization. Ensure thoroughness and conduct due diligence when facing the build versus buy decision for the data center by following a structured process.

Executive Summary

Organizations planning to build or refresh the data center should consider the build versus buy decision in the planning phase. This decision requires careful examination and evaluation of options involving asset inventories, facility requirement estimations, and a high level budget. Every step in this process is necessary to gather the information required to make the best decision for the organization. Ensure thoroughness and conduct due diligence when facing the build versus buy decision for the data center by following a structured process.

Organizations looking to build or refresh the data center need to engage in a thorough planning process before taking action. Critical components to the planning process include:

  • Determining the business need.
  • Addressing application design and requirements for criticality, capacity, and growth.
  • Establishing storage, server, and network requirements.
  • Estimating facility requirements for power, cooling, and UPS.  

Upon completion of this process, IT will be better equipped to face the build versus buy decision. Approaching the build versus buy decision incorporates a comparison of costs to a Greenfield build and/ or data center refresh to that of outsourcing either components or the entire data center. Refer to the following process in the beginning stages of planning to ensure all details have been considered.

Figure 1. Data Center Planning Flow Chart

Source: Info-Tech Research Group

Step 1: Discovering business needs. The first step in the planning and design of the data center is to evaluate the current and future needs of the business. IT should involve key stakeholders such as executives, managers, and a sample of end users from various user groups in the organization to present a full picture of current and upcoming projects that the data center must support.

Step 2: Application design and requirements. The business needs assessment will inform and educate IT on the design and requirements of applications. This step will involve gathering an inventory of current and future applications to assess in the following step.

Step 3: Criticality, capacity, and growth. Using the applications requirements inventory, IT should determine the criticality, capacity, and growth potential of each application. Planning for these specific characteristics of each application can help to determine how many servers, how much storage, and how much support the network must provide to run the applications throughout the lifespan of the data center or co-location engagement.

  •  Criticality of applications will examine the business importance of each application and address how much downtime is tolerable in order to provide the optimal support. Applications that are less critical may be housed on servers outside of the data center or may be grouped in a different area of the data center, while critical applications may require additional standby power or backup.
  • Capacity planning will help to determine how many servers are required to support the organization's applications. It will examine the amount of computing required at each stage and aid in determining the associated power requirements.
  • Growth estimations should address all of the issues in capacity planning above but should also consider future needs of the business and account for uncertainties. Often, IT will oversize capacity to encompass future growth by looking at past growth statistics in the business or assessing the projects gathered in the business needs assessment. IT must be careful and thorough in their estimates for oversizing. Oversizing for future requirements is essential for the longevity of the data center, however, over-estimating can be expensive and wasteful.  

Step 4: Storage, server, and network requirements. By assessing the criticality, capacity and growth of application design and requirements, IT can develop a better understanding of storage, server, and network requirements for the data center on which to base the requirements. This will also help to develop the final budget for the project.

Step 5: Facilities requirements. Estimating the facility requirements can present IT with a full picture of what is required to build or refresh the data center, to develop a high level budget, and timeline for the project. IT must gather information for power, cooling, standby power, fire protection, sizing, and architectural space layout in order to obtain a complete view of what the data center needs.

Step 6: The build versus buy decision. Once all requirements for the data center have been established and estimated. IT can create a high level budget to compare the costs, time, and effort of building a data center versus outsourcing or "buying" the data center. While some organizations may have had the initial intention to build a data center from scratch or refresh the existing data center, it may be discovered, after gathering all requirements and putting a cost figure to each, that outsourcing is more cost efficient and beneficial in the long run.

Recommendations

   1. Ensure thorough planning. Careful consideration and time should be spent on the initial planning stages for data center build. Ensure all the steps are taken to estimate and assess requirements. Organizations that have already made the choice to invest in a co-location solution should still follow this structured process as it will aid in the vendor selection process and a quicker implementation.

Consult a third party. Enterprises that have decided to go ahead with building a data center should recognize that it is not a "do it yourself" project. After determining initial requirement estimations, IT should involve third party experts to aid in areas where in-house expertise lacks. For additional information on how a third party can aid in the data center project, refer to the McLean Report research note, "Server Room Renovations and Expansions: Not a DIY Project."

Explore co-location options. Many organizations hesitate to co-locate their data center, however co-location often results in significant cost savings. When planning to build or refresh the data center, be sure to consider all options and evaluate co-location solutions after requirements gathering.

Bottom Line:Organizations planning to build or refresh the data center should consider the build versus buy decision in the planning phase. This decision requires careful examination and evaluation of options involving asset inventories, facility requirement estimations, and a high level budget. Every step in this process is necessary to gather the information required to make the best decision for the organization. Ensure thoroughness and conduct due diligence when facing the build versus buy decision for the data center by following a structured process.

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