A man staring at a server rack

A Data Center Fit for Midmarket Personalities

16 Mar 2016 by Sally Clasen

This article was revised October 14, 2016, to bring our readers the most up-to-date technology information.

The data center has become the darling of the digital economy. It’s always been an important¬ — though quiet — IT function, operating out of the broom closet without much fanfare. But the data hub has emerged as an organization’s lifeline, tying the hyper-connected world of e-commerce to a physical location — a vital process that now completely controls the continuity of daily operations in most businesses.

Things are moving so fast in the digital space that data centers must reflect the changing times, using the latest technologies to meet the demands of the marketplace and gain a competitive edge.

“At the same time, there will be an increase in investment around the Nexus of Forces (cloud, social, mobile and information) as many businesses focus on growth and new opportunities,” according to a Gartner report.

Step up your data center game.

Small and medium-sized businesses need to harness the benefits of so-called big business data technology to capitalize on outcomes and keep pace within the sector. Aware that data centers are the heartbeat of any operation, the midmarket is stepping up their data-budget game.

According to a study conducted by Research and Markets, small to mid-size businesses will allocate increasing percentages of their technology budgets for data center services, leading to considerable expansion in the sector with a compound annual growth rate of 18.39% from 2013 through 2018.

One size doesn’t fit all when it comes to data center design. The growth of the digital landscape today forces IT leaders to think about data management in a new way. They must consider their organization’s business needs, data security and system when developing innovative strategies that reflect the modern tech age.

As the aforementioned Gartner report suggests, while most companies have adopted data center processes that match their technology infrastructure, they don’t necessarily reflect their business needs or company personality. “Many legacy applications will require a high level of risk and availability management, whereas running worldwide operations across multiple data centers in multiple geographies will require high levels of integration and intelligence. The ability to map the requirements to the personalities is key.”

Data center dynamics: What do you need?

One of the first steps to develop a robust and agile data center that best suits your organization’s characteristics is to ask, “What does your business need?” If your enterprise is a controlling sort that runs multiple applications and workloads, a customized and dedicated internal data center is probably the best option, vs. handing data and equipment storage over to a third-party provider for maintenance and administration. It takes time to build a data center from the ground up, however and, once it is built, capacity is limited. It will require equipment upgrades to handle additional increases in storage needs.

A cloud service, on the other hand, is scalable to business growth and helps simplify data management initiatives. In addition, it’s a productivity win because it gives access to files anywhere, anytime via the Internet. You can also make adjustments to the system without instituting a major re-architecture. This can be especially attractive to growing companies that need a flexible backup and disaster recovery plan that won’t break the bank. Plus, cloud computing offers zero risk of losing information from equipment damage or theft.

Just like any business resource, cloud-based services are not created equal. Learn what types of integration are supported, and the time and complexity it takes to implement applications. And remember: If your operation is completely cloud-based, you’ve given up control over function and execution of your hosting infrastructure and are entirely dependent on the Internet. That means you won’t be immune to system outages and downtimes.

How secure are you?

Security and privacy are major considerations when evaluating data center options. It’s become a heated IT debate. Does the cloud provide the same safety protection as private networks to store data, and prevent security breaches and cyberattacks? By nature, such off-premises storage solutions pose an increased security risk because of accessibility to the Internet from mass users, who just might happen to have proper credentials or passwords. The bottom line is: “How secure does a company want to be?”

For many businesses that deal in highly confidential and proprietary information — such as healthcare, financial and government agencies — entrusting security to third-party providers is not a risk worth taking. Despite the inherent risks, organizations across the board operate safely in the cloud, running apps, storing files and backing up without incident. Instead, an in-house data center technician is generally the best, if not a costlier, option.

IT decision-makers must conduct due diligence when contemplating a partnership with an offsite data provider. The potential security risks must be evaluated in the same way that internal business processes and systems are evaluated. All potential cloud and other off-premises data vendors must understand exactly what the arrangement will entail. Issues to assess include audit trail processes, encryption policies, where servers and data physically reside, access controls, SLA uptime and what security compliance standards have been met.

What can you afford?

Of course, what a business requires in terms of data center performance and security protection is one thing. What it can afford is another matter. In spite of projections that data service spending is on the rise, budget is still a major hurdle for small and medium-sized businesses. Data center costs begin with server and equipment expenses. Additionally, there is the cost of owning or leasing a physical space, and the costs of power consumption, management and data recovery. According to a 2015 report, you could be looking at $10 to $25 million annually to run a data center.

3yr server & 10yr infrastructure amortization chart

It is possible, though, to accommodate data storage needs without having access to a big budget. Cloud computing has leveled the playing field in terms of data management affordability, especially in the midmarket category.

A cloud provider can offer significant savings over using an internal data center for a growing business, since the monthly service fee helps avoid large up-front capital expenses and minimizes the costs associated with IT equipment, staff and physical storage requirements.

Small and medium-sized businesses not willing to give up complete data oversight but wanting the flexibility of lower costs, off-site storage and recovery benefits that grow with their enterprise should consider a hybrid mix of onsite data services combined with external cloud resources, which might better match their data center personality.

If you’re ready to “try on,” and mix and match different data center “personalities,” download the Gartner report, “How to Select the Correct Data Center Option for the Digital World.