Resurgence of Captive Datacenters: A Contrarian View

The upward trend of virtualization and higher power densities with improved thermal efficient datacenter architectures and technologies will further reduce costs of owning a captive datacenter.

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Conventional wisdom says that cloud and economies of scale will drive away the smaller to mid-sized captive datacenters. While without doubt, the trend of building and operating extremely large multi-tenant datacenters (MTDCs) will continue, there are solid indicators to show that the mid-sized captive datacenter is not likely to vanish any time soon. In fact, they would flourish, co-exist, and collaborate with the MTDCs, much like a supply chain of large and smaller players in a distribution chain. First, some definitions are in order. We are referring here to smaller and mid-sized captive datacenters in the Indian context, which typically would be less than 2,000 sq ft of white space having up to 50 racks and 1,000 servers. With that, let us examine the arguments behind the migration from captive to a MTDC. Running a datacenter is not a core competency of the enterprise. Upgrading a legacy or building a new datacenter is time consuming and expensive. A tier-3 compliant datacenter costs `40,000 per sq ft to build. Rather than incur a capital expenditure of `8 crore for a 2,000 sq ft datacenter that would take six months to build, management may prefer an opex model of `6 lakhs per annum per rack at a MTDC. Beyond the build cost, there will be capital costs to procure critical infrastructure like power back up units, HVAC, transformers, switchgears, fire control systems as well as operating costs like power, maintenance and personnel to maintain them. The rental payments to a MTDC include all that, plus the comfort of a Services Level Agreement (SLA) that assures 99% uptime. The kind of investments that a MTDC makes to provide robustness, resiliency and redundancies with full Disaster Recovery (DR) capabilities is difficult for an enterprise to make for in-house datacenters without incurring huge capital costs. These are compelling arguments for migrating to a MTDC, particularly if the operations fall within our definitions of datacenter size. However, let’s look at trends that offer a contrarian view. A FEW TRENDS Some verticals like banking and healthcare have increasing concerns about data privacy and security. While they wish to stick to core competency thesis, they continue to maintain in-house datacenters, operated and maintained by a managed services provider. 

A FEW TRENDS Some verticals like banking and healthcare have increasing concerns about data privacy and security. While they wish to stick to core competency thesis, they continue to maintain in-house datacenters, operated and maintained by a managed services provider. Tier-3 compliant redundancies and fail-safe operations are required for only a minor set of applications in most verticals. Many enterprises are adopting a hybrid model where mission critical applications are hosted out of MTDCs, and non-mission critical applications and test and development environments are maintained out of captive datacenters. – See more at: http://www.dqindia.com/dataquest/feature/215583/resurgence-captive-datacenters-a-contrarian-view#sthash.kOHZRtLQ.dpuf

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About Five 9s Digital, LLC

Five 9s Digital is a data center real estate company offering data center development, investment sales, real estate advisory, and colocation and wholesale data center selection and procurement services. Five 9s Digital has been involved in the development and ownership of multiple mission critical facilities from single user build-to-suit facilities to multi-tenant data centers. Five 9s Digital brings a wealth of experience, background and expertise in providing solutions to the data center arena. Due to the specific and yet evolving requirements of mission critical end users in today’s world, Five 9s Digital is able to offer real solutions, real facilities, and real choices due its extensive and up-to-date knowledge base. Five 9s Digital is a Best Data Sites Certification Alliance™ member.
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