Why Should Your Business Be Thinking About Using a Data Center?

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Increasingly, companies are embracing the operational and financial benefits of data center outsourcing. The heightened demand has resulted in the creation of hubs in various places across the country, where millions of square feet of data center space is available. Here, you’ll learn why companies should consider moving to a data center.


Today’s data centers are required to offer SLAs (service level agreements) related to the building’s infrastructure and environmental elements. When a center operator misses an SLA, they’re required to compensate tenants for their losses. Therefore, buildings’ systems and designs are typically state-of-the-art and well-maintained to avoid excessive downtime and resulting in financial penalties.

According to a study from the Ponemon Institute, it takes approximately 134 minutes for a data center to recover from an outage, at a cost of about $680,000. Companies’ in-house data centers might not be operated or built to the same standards, because in most cases, they were built years (or even decades) ago. Below is a simplified tier rating system by which data center resiliency is graded.

  • A tier-1 data center with basic infrastructure has an expected availability of 99.671%.
  • A tier-2 data center with redundant infrastructure has an expected availability percentage of 99.741%.
  • A tier-3 data center with concurrently maintainable infrastructure has an estimated availability of 99.982%.
  • A tier-4 data center with fault-tolerant infrastructure has an estimated availability of 99.995%.

Mitigation of Risk

By creating some distance between your company’s headquarters and its data center, you’ll reduce or eliminate the chance of one event—such as a natural disaster or a blackout—knocking both facilities offline. A distance of 25 to 100 miles between your corporate headquarters and the data center is optimal, as your team will still have some access as well as a buffer zone between yourselves and the hub.

The proximity of headquarters and data center facilities must consider the latency tolerances of applications that are used in both locations. Many of today’s companies are lessening the risk by creating co-location centers and data center hubs in crucial areas where data center operators offer the highest-quality inventory.

Tax Benefits

Today’s top data center markets offer perks such as the elimination of personal property taxes on IT equipment, sales tax cuts, job creation tax benefits, and additional advantages that aren’t found on the secondary market.

Faster Delivery Speeds

Building a data center or upgrading a current one may take a year or more. However, a data center operator has a ready inventory of power and space, offering your company the flexibility and scalability to expand as needed. With outsourced data centers, the time to occupancy may be significantly reduced and delivery speeds are increased.

Decreased Power Costs

Power is one of the most substantial costs in a modern data center. The largest-scale operators often consume 100-200 watts for every square foot of floor space, which allows them to negotiate more favorable rates with local utility companies. In data center hubs, power may cost anywhere from 40-60% less than the nation’s average.

Closing Thoughts

Regardless of your company’s size or type, it’s no longer advisable to understate the importance of data center reliability. Whether you have a large company and vast financial resources or you’re running a startup, let the evidence guide your decision to lease data center space.