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Managing data center growth: Consolidate, colocate or move to cloud?

Is your data center running out of capacity? In this economy, building a new facility isn't always an option, and many older data centers can't handle high-density virtualized workloads. That means many IT pros will look outside in-house data centers to colocation and cloud computing providers.

One of the biggest challenges IT managers face today is increased demand on data centers. New technologies, security threats and compliance requirements have forced many IT execs to consider other data center options, from consolidation to IT outsourcing options such as cloud computing and colocation providers.

In the past, when large budgets, venture capital investments and growing revenues reigned supreme, solving data center overutilization problems was a simple matter of building a bigger and better data center. With today's economic downturn, that solution just won't fly. Data center managers have found themselves dealing with annoying details, such as return on investment (ROI) and total cost of ownership (TCO), before the CFO loosens funding for any project, particularly breaking ground on a new data center facility.

IT execs must perform due diligence before proposing a solution an over-utilized data center, and that requires a long, hard look at the problem and all available options. With data centers, there are many paths to consider.

If the data center is running space, thermal footprint or energy usage in the data center, IT managers should look at consolidation first. Can the existing servers be replaced by blades or other technologies? Can virtualization be implemented? Can services be combined on servers? Can storage be improved? All of these are viable questions.

If hardware utilization is the root cause of the problem, IT pros should consider server virtualization. Many applications have responded well to server consolidation with virtualization technology. Simply put, if an individual CPU is underutilized, deploying multiple virtual servers under that same CPU may reduce the need for physical servers and stave off a major upgrade. However, virtualization and server consolidation can increase power use and cooling needs of individual servers, and some data centers may not be able to handle the increased power and cooling density.

If the answer is "no" to the data center consolidation question, which options does that leave data center managers? Luckily, there are other paths to follow. First and foremost is the option of using colocation services, where space and equipment can be leased in another data center. Colocation offers several advantages for those looking to expand or replace data centers.

  • Bandwidth and initial costs. Colocation data centers are usually equipped with redundant and high-speed connections to multiple Internet backbone networks. That brings redundancy into a corporate network while defraying some of the costs of provisioning high-speed connections.
  • Uptime. Colocation facilities can offer better protection against outages, equivalent to large corporations' data centers. Most colocation sites offer five 9s (99.999%) of reliability and incorporate redundant power lines, on-site backup generators and multi-homed Internet connections. Most colocation centers also carry spare or replacement parts on-site, reducing the time it takes to repair a failed device.
  • Ownership. Most colocation centers offer clients ownership of the hardware in use. That allows corporations to upgrade hardware and software as needed.
  • Relocation. If a business moves or relocates offices, the colocation site is unaffected and there will be no downtime.
  • Management. Most colocation centers offer on-site hardware and software management, eliminating the need to place employees on-site fulltime.
  • Security. Most colocation sites have hardened security features with controlled access and incorporate the latest security products at the edge. It is not uncommon for a colocation site to keep a customer's racks locked in secure cages.

For some, colocation may be an ideal solution, but there can be downsides to this approach that data center managers need to be aware of before making the leap into colocation center.

  • Location. Colocation centers that are convenient or close to corporate headquarters may be hard to find. Distance translates into increased travel costs.
  • Expense. A colocation provider may require the lease or purchase of space, hardware and software with a substantial markup. Colocation centers may also have additional charges or surcharges for staff, energy use and bandwidth. Users are also locked into long-term contracts, which may prevent renegotiating rates as prices fall industry wide.
  • Access. Physical access to the equipment may be limited, relying on the staff at the colocation site.

Just like any other technology, colocation has its pros and cons, meaning that IT managers will have to carefully balance all factors before making a decision to pursue a colocation arrangement. Further complicating the decision process is yet another group of technologies that can be used instead of a colocation arrangement or data center expansion. That group of technologies is collectively called "cloud computing" or "the cloud."

A cloud computing provider can be a viable alternative to traditional data center expansion, yet it still suffers from growing pains and vendors entering and exiting the market. In its simplest form, cloud computing equals moving corporate applications onto hosted systems or virtual servers and accessing those applications via a Web browser or other local client technology. Simply put, all data and code is moved over to a cloud services provider and then accessed via the Web. Some reasons to move to the cloud include the following pros.

  • Fast startup. For applications that are already cloud-enabled or services that already exist, moving to the cloud can be almost instantaneous.
  • Scalability. Most cloud services providers can scale up or down as needed to meet corporate needs. Cloud computing works well for seasonal demands and projects that vary in scope and size.
  • Agility. Cloud services can quickly evolve to meet business needs, without requiring a major re-engineering effort.
  • Lowered capital expenditures. Most cloud services bill based upon usage with a flat-fee scale, eliminating large initial capital expenditures.
  • Lower support costs. Support is usually included with the services, eliminating the need for dedicated IT support staff or internal help desks.
  • Reduced user expenses. Most cloud services require little more than a browser-equipped PC.

While many of the pros make for a compelling argument to use the cloud to deliver IT services, IT managers need to be aware that there are still many cons associated with the cloud.

  • Connection dependency. Users must have reliable Internet connections to use cloud services effectively.
  • Reliability. Cloud services may not offer the same level of reliability as other options.
  • Latency. Cloud services can experience latency and performance problems caused by reliance on the public Internet.
  • Security. Cloud services are accessible via the Internet and may be subject to interception, blended attacks and other security problems.
  • Data ownership. Careful consideration must be applied to the ownership of intellectual property and who has access.
  • Applications. Line-of-business applications may need to be re-engineered or replaced to work in the cloud.

Most data center managers will find that before choosing cloud computing, significant planning and due diligence must be performed. That said, the cloud does offer IT execs a way to perform pilot projects before committing to a final decision.

Data center managers will find that the several options presented above may fit different IT needs based upon the size of the organization. For example, a small business that depends on high Web traffic will benefit from a simple managed Web hosting solution, which may be the most economical solution. A large enterprise may find it more cost-effective to keep its Web operations in-house, especially if it has a well-developed IT staff and plenty of server space. On the other hand, Web applications that require more robust servers than typical Web hosts provide can benefit from colocation. Finally, many midrange companies may find that colocation is an ideal compromise between renting space on preconfigured servers and owning an expensive data center.

What did you think of this feature? Write to's Matt Stansberry about your data center concerns at

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