As seen in Data Center Management
Building a data center rather than leasing one is a bold decision. Understand why an organization might do it and what approaches work best.
If a job is worth doing, then sometimes, it’s worth doing yourself. For some companies, that may also include data center construction. Building your own data center from scratch can be an expensive and time consuming task. The most mission-critical ones can take 15-20 months or more to get up and running. But there are advantages, too.
Companies that decide to build their own data centers are going against the market, warns Scott Stein, managing broker for consulting firm Global Data Center Solutions. He says that there is plenty of empty real estate well-suited for data center operations. “Prices have plummeted,” he says.
Most experts agree that the threshold for cost effectiveness is around 5Mw in size. Build one below this size, and economies of scale will work to a company’s disadvantage. The likelihood that it will be more expensive in the long term than leasing or colocating inside a wholesale or retail colocation grows dramatically.
The decision to lease or build your own data center doesn’t always come down to cost-effectiveness, though. Those who choose to build must have very specific and compelling reasons for doing so. Some companies may have a corporate policy that requires them to control all of their own IT assets, including the facility. That requirement may come from customers. Some companies may prefer for accounting reasons to keep real estate as an asset on the balance sheet, rather than on the profit and loss statement.