Alan Seal

By: Alan Seal on July 1st, 2019

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How to Improve Your IT Cost Reduction Strategies With a Data Center

Data Center Operations

When organizations build their networks, they must make decisions with an eye toward cost. In addition to the question of how much it will cost to get their systems up and running, they also have to consider how much it will cost to manage and scale them over time. Traditionally, building these networks required companies to build a new, on-premises data center from the ground up. The high costs associated with these facilities, however, posed a significant barrier to entry for many companies and made it difficult for others to scale in a cost-effective way.

Overhead Cost Reduction Strategies

For organizations that have to manage a lot of data and deliver services over their network, there are two major IT cost-cutting ideas worth considering. The first option is to do away with physical infrastructure completely and migrate all of their assets to the cloud. While this obviously eliminates the costs associated with maintaining equipment and consolidates IT expenses into a single service, there are significant limitations to a purely cloud-based solution that are simply not acceptable for many organizations. Privacy concerns, downtime issues, and compatibility challenges with legacy systems all make cloud platforms an imperfect solution for companies offering diverse and specialty services, causing them to seek other cost reduction strategies for their business.

Colocating servers and IT assets with a third-party data center is another popular overhead cost reduction strategy. Most organizations like the flexibility and control that comes with managing physical assets in a data center; what they don’t like is having to build and operate these facilities themselves. Given the high costs of building a private facility, it’s no wonder that only large companies with extensive capital resources and extensive service offerings can justify the investment in such a project. Colocation services allow even the smallest organizations to gain access to the benefits of an enterprise-grade data center at a fraction of the price it would cost to build their own facility, greatly reducing their own operating expenses in the process.

Colocation Data Center Costs Breakdown

There are a number of ways that colocation can help organizations to save money, making contracting with one of them among the most effective IT cost reduction strategies. These facilities also provide tremendous flexibility for companies looking to reposition rapidly to take advantage of new opportunities.

Power & Cooling Costs

One of the biggest IT expenses a company has to manage is powering and cooling their equipment. The processing power of computing equipment is constantly improving, allowing organizations to offer newer and better services. However, that increased performance doesn’t come without a price. More powerful processors generate more heat, which in turn requires better cooling infrastructure to regulate their temperature.

Efficiency and scale matter when it comes to regulating power and cooling. A highly efficient network uses sophisticated analytics and monitoring software to ensure that computing assets are provisioned properly, powering systems down when they’re not needed and cycling them up when the demand is there. Without this monitoring ability, the average server runs constantly, consuming far more power than is necessary and generating excess heat. But managing that heat can be a problem if a facility has an inefficient cooling system. Conventional cooling systems consume a great deal of energy, so running them more than needed can quickly send costs spiraling out of control.

A colocation data center not only uses economies of scale to distribute power and cooling costs across its infrastructure, but also utilizes the very latest in monitoring tools to ensure that equipment is operating as efficiently as possible. With DCIM software like vXchnge’s award-winning in\site platform, colocation customers can even manage their infrastructure remotely to ensure that they’re using only as much power and cooling as they need to control their costs.

Connectivity Costs

Whether a company is using an edge computing framework to deliver services through the Internet of Things (IoT) or managing workloads in a hybrid cloud environment, having the right connectivity options can make or break a business. When operating a private data center or relying on a public cloud platform, organizations are limited in their choice of connections. To get the connectivity to the service they need, it might be necessary to invest heavily in running physical cables to a new location. And even after they get that service, their lack of alternatives could leave them facing a vendor lock-in situation.

Carrier-neutral colocation data centers provide a connectivity-rich environment for their customers. These competitive marketplaces are a huge asset to IT cost reduction strategies, allowing companies to secure the services they need at prices that won’t break their IT budget.

Compliance Costs

Managing a private data solution brings a number of compliance-related headaches along with it. While colocating assets with a data center doesn’t mean a company can forget about compliance standards altogether, it does provide them with the best possible start when it comes to building a network aligned with regulatory standards. Since a compliance violation can result in costly fines, taking the time to get compliance right is an IT cost reduction strategy every business should value.

IT Personnel Costs

Any organization that delivers services over a network obviously needs experienced and talented IT personnel to help execute its business strategy. However, they also face an important question about how they want those employees spending the majority of their time. Do they want IT personnel to be constantly troubleshooting their network or developing innovative new ways for their company to deliver the services customers will want?

One of the more exciting IT cost-cutting ideas available to colocation customers is access to 24x7x365 remote hands support teams. Rather than tasking their own IT department with managing the day-to-day burden of monitoring and testing their network infrastructure, companies can outsource that role to a remote hands team. This allows their own IT personnel to focus on higher-value tasks that will help their business grow in the future.

While migrating assets to a cloud platform is a viable overhead cost reduction strategy, many organizations are instead turning to colocation data centers as an alternative IT cost-cutting idea. Colocation facilities provide the visibility, control, and flexibility that today’s high-information companies need to evaluate the market, identify opportunities, and take quick action to capitalize on them. By partnering with a colocation data center as part of their IT cost reduction strategies, these companies can position themselves to scale and succeed without compromising their budgets.

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About Alan Seal

Alan Seal is the VP of Engineering at vXchnge. Alan is responsible for managing teams in IT support and infrastructure, app development, QA, and ERP business systems.

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