Achieving Cost Savings for Businesses Through Outsourcing Infrastructure To Data Center Services

For modern businesses, outsourcing infrastructure to data center services makes perfect financial sense. Businesses can reduce both capital and operational costs while maintaining if not improving their operational standards. Here is a quick guide to what you need to know about how data center services can benefit your business.

Understanding data center services

Data center services are services that allow organizations to outsource the provision and/or management of IT infrastructure to specialized vendors. These vendors run facilities that provide secure, scalable, and reliable environments for data storage, processing, and networking.

Main types of data center services

There are three main types of data center services. Here is a brief overview of them.

Colocation: Colocation involves renting space in a third-party data center to house servers and other hardware. Businesses retain ownership and management of their equipment while benefiting from the data center’s infrastructure, including power, cooling, and physical security.

Public cloud services: Public cloud services provide virtualized computing resources over the internet. These include Infrastructure as a Service (IaaS) for on-demand hardware, Platform as a Service (PaaS) for development platforms, and Software as a Service (SaaS) for hosted applications, allowing for flexible and scalable resource management.

Edge computing services: Edge computing services deploy processing power closer to the data source to reduce latency and bandwidth use. This is critical for applications requiring real-time data processing, such as IoT and autonomous systems.

How data center services reduce capital expenses

Data centers are extremely expensive to build or buy. This is because the builder/purchaser has to cover significant upfront costs before the data center can go into operation. These costs generally cover three main areas.

Real estate: In addition to the cost of the real estate itself, buyers also need to factor in the associated transactional costs such as legal fees and property taxes. These vary from area to area but can be very high, especially for large-scale, centralized data centers.

Infrastructure: Data centers need extensive physical and digital infrastructure. Moreover, data centers will often need or want to have their infrastructure vetted by regulatory bodies. There is generally a cost for this.

Staffing: All data centers need some level of staff. Furthermore, the staff they need are typically very highly skilled. These staff need to be recruited before the data center can open.

For data center services vendors, these costs can be justified as the provision of data center infrastructure is, literally, their business. For most other businesses, however, it makes a lot more sense to avoid this level of capital expenditure and use their cash for other purposes.

How data center services reduce operating costs

The benefits of using data center services go beyond the initial savings on capital expenditure. There are often ongoing savings to be made through reduced operating costs. Here are five examples of how using data center services can help businesses to reduce their operating expenses.

Economies of scale: Data centers benefit from purchasing hardware, software, and bandwidth in bulk, passing these savings on to clients. This bulk purchasing reduces the overall cost of IT resources for individual businesses.

Reduced power costs: Data centers leverage advanced cooling technologies and energy-efficient systems to optimize power usage. They spread these costs across multiple clients, resulting in lower per-client expenses compared to maintaining an in-house facility.

Scalability: Data centers offer scalable solutions that adjust to business needs without significant upfront investments. This elasticity allows businesses to pay only for the resources they use, avoiding the costs of over-provisioning and underutilized equipment.

Lower staffing costs: By outsourcing to data centers, businesses reduce the need for extensive in-house IT teams to manage infrastructure. Data centers provide round-the-clock support and maintenance, which lowers personnel and training expenses.

Enhanced reliability: Data centers offer high redundancy, backup systems, and professional management to ensure maximum uptime. Reduced downtime means fewer financial losses due to interruptions, leading to significant cost savings for businesses.

Additional benefits of using data center services

In addition to the financial benefits, using data center services can bring a range of additional benefits. Here are just three of the main ones.

Focus on core business activities: By outsourcing IT infrastructure management to data centers, businesses can focus on their core activities and strategic initiatives. This allows for better allocation of resources and efforts towards innovation, customer service, and competitive differentiation.

Access to expertise: Data centers employ specialized IT professionals who manage and optimize infrastructure. Businesses benefit from this expertise without the need to hire and train in-house staff, leading to more efficient and effective IT operations.

Easier path to compliance: Most data centers will be compliant with a range of data security standards, especially the major ones. This creates a much easier path for businesses to meet their own compliance obligations.