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10 Reasons to Choose an Outsourced Data Center

Author : Sunil Gupta
Date : November 13, 2014
Category : Datacenter

Why should large and mid-sized organizations consider data center outsourcing? The reasons can be varied - large and mid-sized enterprises are embracing the trend for its financial and operational leverage.

According to a recent survey of Fortune 500 companies by Forbes, most IT leaders prefer an outsourced data center over in-house operation. This brings us down to our next question - What are the key factors supporting this booming trend of data center outsourcing and What makes outsourced data centers scale the competitive winning edge when it comes to customized business offerings to customers?

The decision to outsource to a data center involves careful examination of options from a strategic level, business perspectives and a thorough tactical evaluation to involve asset inventories, facility requirements and budget considerations.

Given below are the top ten reasons why outsourced data center are in-demand over the traditional in-house operations are:

Uptime Guaranteed

The outsourced datacenters are governed by service level agreements (SLAs), which have to be complied by them. The SLAs encompass all the environmental and infrastructure elements to include state-of-the-art building systems and designs, which are maintained at the highest level to reduce downtime and subsequent financial penalties.

According to a study by Ponemon Institute the average recovery time for total data center outage is 134 minutes. The outsourced data centers provide for 99% of expected availability of basic site infrastructure, redundant site infrastructure capacity components, concurrently maintainable site infrastructure and also a fault-tolerant site to be prepared in case of power outage or unexpected delay of distribution facilities.

Creating Distances for Risk Mitigation

The distance between a company’s headquarters and its production data center helps eliminate the risks associated with events such as utility blackout or the occurrence of a natural disaster. Hence both the corporate headquarters and the data center, if located at a distance between 25 to 500 miles is ideal and will allow the team to reasonably access data from the center while offering buffer distance from the main hub. It is also important to take into account the latency tolerance of applications in the data center and between facilities running at both the center and the corporate headquarters. Hence, companies are now setting up data center hubs and colocation facilities in key markets where outsourced data center operators offer high quality inventory to mitigate risks.

Scalable Capacity

The current economic climate with increased technical and regulatory pressures is impacting business infrastructure in most organizations. As a result, the business agility gets compromised either due to over utilization or under-utilization of capacities of in-house datacenters. In such a scenario, collocating an organization’s infrastructure to a third-party provider will provide enterprises with the much-needed flexibility, cost-effectiveness and scalability. Consequently, businesses can better focus on their immediate goals keeping the end objective in plain sight.

Enhanced Delivery Speed and Flexibility

Building a new datacenter or upgrading an existing one can be quite a time consuming process and can take up to 2 years. Outsourcing to an external datacenter service provider takes care of power and space challenges and provides better flexibility for expansion plans and a scalable growth platform.

Impacts Savings and Boosts Branding

Data center outsourcing can beef up your bottom line by saving costs on operations typically related to IT labor, association overhead, equipment maintenance, upgrades and physical space. The enterprise can further choose to lease physical space and retain control of the data center operations or go virtual by migrating to the cloud. This eliminates space considerations and future equipment expenditures at one go and also reduces your total cost of ownership.

It can be quite ironical to know and understand that outsourcing data center operations can impact branding. Now how does this work? Adoption of data center operations exemplifies leadership and establishes your company’s reputation as a brand. This in turn will attract investor confidence and motivate employees to perform better. With a well thought-out service level agreement in place, the outsourcing partnership can assure seamless near-term transition and provide for a long-term solid foundation for futuristic growth plans.

Improved Connectivity and Latency

Improved connectivity and latency are two key elements of any data center functioning, as this allows more room for service providers to offer multiple-carrier offerings. Such diversity offers tremendous leverage for negotiating with the telecom service operators and avail the best offerings with a vast array of carrier choice and minimal provisioning timeframes.

Increased Focus

In an outsourced data center model, the burden of upgrading IT infrastructure and building systems is shifted to the outsourced data service provider, this enables the CIOs and IT managers to focus on more important activities to further the business goals.

Managed Regulatory Compliance and Audits

Outsourced data center model is power packed with compliance and audit capabilities to meet the SSAE16 standards, the health insurance portability and accountability act (HIPAA) and many other government regulations and standards imposed from time to time. Maintaining these standards can be quite difficult for a large IT enterprise to employ dedicated staff for regulatory control management.


Outsourcing data center means OPEX based on resource utilization, hence there is no capital expenditure involved. Companies can therefore invest in more productive areas of business, save considerable money and time to set up a data center.

Conducive Market Environment

The data center outsourcing market in India is growing at a rate of 25-30%, of which third party data center is expected to grow at a rate of 80% in the years to come. Hence, businesses need to take utmost advantage of the conducive market environment for growth.

In Conclusion

Outsourcing data centers is the ideal way to align IT with business objectives in the most cost-effective manner. Some of the key benefits associated with outsourcing data center are: organizations can gain higher operational and financial efficiencies, manage hosted IT infrastructure to enhance customer satisfaction and proactively monitor operations. The benefits of outsourced data center further allow for maximum freedom and flexibility in daily IT operations, along with protection of IT infrastructure from technology obsolescence.

Author : Sunil Gupta

Sunil's expertise spans management and growing of datacenter business. His experience includes driving business development, service delivery and assurance, revenue assurance, and back office infrastructure operations and growth.Prior to joining Netmagic, he spent over a decade at Reliance Communications where, as Senior Vice President, he helped build and manage their Internet Datacenter business. He is a regular speaker and panelist at major industry seminars and trade shows.Sunil has over 18 years of IT and Communication industry experience. He has held senior executive positions at Global Telecom Services, Iris Software and Angel Solutions. Sunil has an Engineering degree with a specialization in Electronics and Telecommunications as well as a MBA in Marketing Management.