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How to Scale Your Small Business With a Data Center

By: Ernest Sampera on May 17, 2019

In today’s fast-moving, interconnected economy, a company’s IT solutions can either empower it to compete in increasingly crowded markets or hold it back. Developing a strategy for technology infrastructure is no longer just a concern for large-scale enterprises, but also for the smallest businesses. If an organization doesn’t have a plan in place to address its future data and computing needs, it can be caught in a situation that makes it impossible to respond to changing circumstances or take advantage of unexpected opportunities.

For many small businesses, building and maintaining a private, on-premises data center is a capital expense that’s simply beyond their means. Even if they are lucky enough to build out an existing property rather than breaking ground on an entirely new facility, the estimated cost of building a data center is about $200 per square foot. Installing fiberoptic cables to ensure the fastest connections with minimal latency can cost over $10,000 per mile to reach the business’s location.

But that’s just the initial cost. Infrastructure maintenance, around-the-clock monitoring, staffing, and additional cooling equipment can significantly increase a data center’s total-cost-of-ownership (TCO). The average lifespan of a server is about 3-5 years, depending on usage patterns, and costs between $3,000-$5,000. Small businesses often can’t afford to build for their future needs because it doesn’t make financial sense to invest in expensive hardware that’s going to sit around collecting dust until it’s needed.

Fortunately, that’s where data centers can help.

For a typical small business, a data center offers an ideal answer for their IT infrastructure requirements. Whether a company decides to colocate its own hardware in a facility or utilize data center as a service (DCaaS) plans to maintain flexibility, data centers can provide a cost-effective IT solution that can be scaled quickly and effectively.

5 Ways a Small Business Can Scale With a Data Center

1: More Data Storage

The amount of data being generated is increasing every year at a staggering pace, prompting many people to wonder where all that information can possibly be stored. As more and more companies begin utilizing internet of things (IoT) devices and edge computing strategies, data collection will present them with significant challenges. Since most of the data gathered by IoT devices and customer-facing applications is unstructured, organizations may not be able to separate business-critical insights from irrelevant noise. Even if they do have the ability to sort through that data using powerful analytics (more on that in a moment), some data will need to be stored for later use or analysis. Legal obligations may also require them to hold information for a set period of time before it can be deleted, forcing the company to maintain sufficient storage capacity as a pure expense.

For a small business operating its own servers, storage restrictions create a hard boundary it can’t grow beyond without significant additional investment. Even if the company could afford to buy new servers or build a new data facility, every moment from the decision to make that investment to the time those new resources are finally up and running represent lost growth opportunities. When using a colocation data center to address its storage needs, a small business can increase its capacity quickly and easily by adjusting its current plan to accommodate anticipated workflow. Even if a small business has sufficient storage, it may also turn to data centers for effective data backup solutions.

2: Increased Compute Resources

Of course, data storage is only one piece of a company’s IT infrastructure puzzle. As mentioned earlier, much of the data companies gather is unstructured and difficult to read or analyze. Consider all the information taken in by a social media application or a mobile device. There are certainly a lot of potential insights to be found in that data, but finding them means analyzing terabytes (or more!) of raw information to identify relevant patterns and tendencies. Sophisticated algorithms and machine learning software can draw valuable insights from this data, but they require a lot of computing resources to do it.

By purchasing additional cloud-based computing assets from a colocation data center as part of their ongoing services, even small businesses can deploy the same “big data” analytics that used to be limited to the biggest companies in the market. For a small business, adding extra computing resources on demand through a data center allows them to improve their productivity and expand services rapidly, without having to wait weeks or months to get new infrastructure in place. Even better, if the company’s computing demands cycle based on annual activity, it can structure its colocation data center plan accordingly to account for these usage patterns. That means it won’t be stuck paying for computing resources it doesn’t need.

3: Better Connectivity Options

Carrier-neutral colocation data centers offer a wide range of connectivity options, allowing organizations to custom build their infrastructure needs from the ground up and rearrange them on the fly. With multiple ISP carriers to choose from, companies can select (or change) partners based on their current and future bandwidth needs, or choose to use a blend of providers for better reliability and security. They can also select from a range of public cloud providers or elect to structure their own hybrid or multi-cloud architecture all within the data center environment.

The open infrastructure of multi-tenant facilities provides a wide range of complex solutions that can be integrated seamlessly to suit small business data center requirements. There’s no worrying about whether systems and services will be compatible because the data center’s infrastructure was designed with connectivity in mind. In the event of difficulties, a small business doesn’t need to worry about hiring new IT staff to implement changes because its data center will have experienced personnel on hand to address whatever problems arise.

4: Enhanced Security

Many small businesses don’t think about how scaling operations will affect the way they approach data security. As they take on new customers and offer new services, however, the data and applications that are critical to their business become increasingly valuable. Protecting those assets is crucial to sustained success, but implementing thorough security measures such as video monitoring, on-site security personnel, and biometric authentication may be prohibitively expensive. By colocating key assets with a data center, a small business can gain peace of mind thanks to the facility’s state of the art physical security and logical access protocols.

There are internal-facing security questions to address as well. As companies grow, they add new employees and create new departments to handle specific tasks. While it might have made sense for every employee to have access to all of the company’s assets and data in the early days, this will not be the case as the company grows. Allowing everyone to access anything at any time can create significant security risks and internal confusion over data management. Placing assets with a colocation data center allows these companies to better manage access to their most valuable resources. With software tools like vXchnge’s in\site platform, they can add or remove employees from access lists as needed and implement additional logical security measures to reduce the risk of errors and confusion.

5: Improved Compliance

As companies expand their business to offer more services to more customers, they can quickly find themselves running into regulatory challenges they never considered when they started out. Perhaps personal data isn’t being properly managed to ensure confidentiality or financial data lacks appropriate security encryptions. Meeting the strict standards of regulatory compliance can present serious challenges to small businesses that can’t afford to bounce back from a potential government fine or customer lawsuit in the wake of a data breach.

Fortunately, today’s colocation data centers are built with compliance in mind. In addition to undergoing strict audits by independent third-parties to obtain certificates and attestations of compliance, data centers can help small businesses understand the latest changes and issues when it comes to regulatory standards. They can also ease concerns about the compliance status of other vendors a company might do business with within the data center environment.

In the long run, a data center presents a cost-effective solution that allows any small business to spend more time thinking about how to use their IT infrastructure to drive their business rather than how to implement the technology assets they need to grow. While large companies may still have good reason to build private data centers and maintain their own IT infrastructure, for the majority of small to medium-sized businesses, partnering with a good data center gives them the flexibility to adapt to changing demands and maximize their existing resources to compete in a crowded market.

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