On-Premise vs. Colocation Data Centers: Which Data Center Solution is Best for Your Business?

Data is everywhere, and with the sharp uptick in data creation, safe data storage and efficient access to applications are essential. Many businesses are evaluating whether an on-premise data center or a colocation solution is right. Teladata’s experienced data centers team helps clients weigh the pros and cons of various data storage equipment (e.g., network, server, storage) in the context of the business’s overarching goals. Before recommending a data center solution, we work together to understand data management practices today and each client’s desired future state.

Pros: On-Premise Data Center Advantages

On-premise data centers have been excellent solutions for many businesses for decades, continually evolving alongside the fast-paced technology industry. 

Key advantages of on-premise data center solutions include:

• More Control. On-premise solutions require in-house management, giving businesses complete control over their IT infrastructure, security, applications, and more.
• Fixed Costs. Aside from the initial build and configuration, an on-premise data center will cost less to operate than a colocation solution—there are no management, third-party service, or rental fees.
• Greater Agility. Because on-premise data centers require in-house staff, businesses may see faster response times and added flexibility. 

Cons: On-Premise Data Center Challenges

There are some drawbacks and challenges associated with on-premise data centers, including:

• Upfront costs. Building an on-premise data center involves a considerable investment in infrastructure and personnel. 
• Long Duration Schedule. Long lead times and complex construction processes typically take over 1 year, compared to colocations, which can be operational in months.
• Staffing Needs. Hiring, training, and retaining staff with the skills required to operate the data center and navigate issues adds another layer of cost and complexity.
• Rightsizing Challenges. As a business evolves, its needs change. Scaling up or down to meet changing needs can be more difficult for on-premise data center teams.  
• Mechanical and Electrical Ownership. Pending your facility’s lease terms, much of your infrastructure buildout becomes the property of building ownership.

Given the pros and cons, on-premise data centers make sense for large enterprises with the financing to shoulder high upfront costs, highly regulated industries like healthcare, higher education, manufacturing, government agencies, luxury private residences, and more. 

Pros: Colocation Data Center Advantages

Many businesses lease data center space in a shared facility to outsource data storage, business continuity, and disaster recovery needs. Key advantages of a colocation data center strategy include:

• High-end Facilities. Renting space in a world-class facility grants access to high-performance computing, advanced physical and cybersecurity measures, and specialized teams to manage it all.
• Scalability. Colocation data centers are flexible, making it easier to scale up or down as business needs change.
• Predictable Monthly Costs. With services billed monthly, operational costs are fixed and predictable.
• Geographic Diversity. Many companies require data operations in various geographic locations throughout the world.  

Cons: Colocation Data Center Challenges

Colocation also presents a few challenges, which may or may not be dealbreakers:

• Less Control. Businesses that lease in colocation data centers gain experienced partners but have less control over managing and operating their infrastructure.
• Less Flexible. Colocations have set operational parameters that may impact your business’ ability to make changes on the fly. 
• Pricing increases. The colocation facility sets costs for overall management, power consumption, bandwidth, security operations, and additional services.
• CapEx vs. OpEx. Colocation operational expenses will exceed the capital expenditures associated with on-premise data center solutions.
• Scalability challenges. Although scaling up is often easy, being locked in to contracts adds difficulty to scale down when needed.  

Every business has different needs, but colocation is an excellent solution for businesses that need fast, scalable access to data center infrastructure, cloud services and overall management—without adding internal capacity. 

Teladata’s Data Center Assessment Offers Insight Into Choosing the Right Data Center

Selecting the right data center solution is a big decision that is best achieved after a thorough needs evaluation. Teladata’s Data Center Assessment process is a comprehensive exercise that helps determine our clients’ requirements and specifications. When you work with Teladata, you don’t have to handle the decisions or the build-out process alone. We’ll help you through the decision-making, implementation, and migration process to ensure you invest in the best possible solution for your company. 

Teladata is a team of client advocates committed to providing the right level of support for each client, whether that’s assessment services, consultation engagements, or a full-service partnership. 

Data Center Assessment

Optimizing data center solutions for your current budget and resources while also aligning them to scale in the future is essential. Teladata works with clients to understand what they need now and in the future. Then, we can help evaluate possible data center solutions, including any combination of on-premise, colocation, and cloud. Our Data Center Assessment includes a deep dive into:

• Site Selection
• Physical Capacity
• Mechanical and Electrical Capacity
• Reliability/Redundancy
• Energy Efficiency
• Short Term and Long-term Needs
• Budget Creation
• Executive Reports for Funding/Approval

Consultation

As trusted consultants, Teladata helps create and execute migration plans that set clear expectations and mitigate downtime. We pay close attention to the details to plan for any required migrations seamlessly and ensure our clients maximize their data center investments. Trust us to plan for:

• Onsite Expansion
• Offsite Migration
• Colocation
• Budget Creation
• Executive Reports for Funding/Approval

Full Service

We are true client advocates who can oversee the implementation of data center migrations or full build-out processes. As a single point-of-contact partner, we liaise with vendors and contractors, manage budgets and timelines, and ensure our proposed data center solutions meet our clients’ needs from the start. We’re your source for:

• Assessments
• Solutions Planning
• RFP/Bid Management
• Project Management
• Technology Fit-Up and Move Management
• Policies and Procedures
• As-Built Documentation

Let’s Work Together

The Teladata team is ready to help you strategize your next data center solution. Together, we can identify gaps and discuss the best next steps for tapping the right data center resources for your needs. 

Reach out to us to learn more about how our data center services can help drive growth for your business. We look forward to connecting!