{"id":97962,"date":"2023-10-10T10:00:33","date_gmt":"2023-10-10T08:00:33","guid":{"rendered":"https:\/\/firstcolo.blackpeppers.de\/own-data-center-vs-cloud-provider-which-is-worth-it\/"},"modified":"2026-03-15T01:25:19","modified_gmt":"2026-03-15T00:25:19","slug":"own-data-center-vs-cloud-provider-which-is-worth-it","status":"publish","type":"post","link":"https:\/\/firstcolo.blackpeppers.de\/en\/own-data-center-vs-cloud-provider-which-is-worth-it\/","title":{"rendered":"Own data center vs. cloud provider \u2013 which is worth it?"},"content":{"rendered":"\t\t
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\n\t\t\t\t\tPress release<\/a><\/span>\t\t\t\t<\/div>\n\t\t\t\t
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Own data center vs. cloud provider \u2013 which is worth it?<\/h1>\t\t\t\t<\/div>\n\t\t\t\t
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Use Nextcloud as a Service and leave the complete provisioning, administration, and maintenance of your secure, GDPR-compliant cloud environment to our team of experts.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t

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Make or Buy? A look at the global development of data centers <\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Frankfurt\/Main, October 10, 2023<\/strong> – The technology landscape is changing at breakneck speed. This repeatedly challenges in-house data centers to provide sufficient space, power, and cooling. As companies grow and scale, it is almost a given that they will need more data center capacity. Across a wide range of industries\u2014from healthcare and financial services to retail and everything in between\u2014large volumes of data are accumulating. And in every industry, applications are being developed that require high computing power. <\/p>

However, not all workloads are suitable for the cloud, so a decision must be made. Should a new in-house data center be built (\u201cMake\u201d), or should space be purchased in a colocation<\/a> facility (\u201cBuy\u201d)?<\/strong> To make a decision, companies must assess current and future infrastructure requirements. If these are variable, the cloud could be an attractive option. If, on the other hand, there is a need for fixed or steady growth, or if in-house hardware is required for other reasons, building or renting a data center is worth considering. <\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Pros and cons of Make or Buy<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Of course, there are various pros and cons to all approaches: When building, companies have full control over all aspects of the data center. When buying, they gain many of the benefits of a data center but do not have to shoulder massive resource investments, which are required to build their own data center. Today, the trend is to outsource the data center in whole or in part in order to focus resources on the core business. As a result, the data center market has grown exponentially. <\/p>

All current market trends indicate that this growth will continue at a rapid pace. The shift to the cloud, advancing virtualization<\/a>, or the Internet of Things<\/a>. Until now, building an in-house data center was the obvious choice for larger companies. The reason was that it made financial sense and was often the only option. Over the years, however, the scale at which a data center must be built to be financially viable has increased. <\/p>

Recent independent industry reports show that this is only feasible with a capacity requirement of more than approx. 15 MW. In other words, you have to build a huge facility to make a data center financially efficient<\/strong>. The scale has increased more than fivefold over the past 15 years. It is also likely to continue rising over the next ten years and beyond. <\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The \u201cMake or Buy\u201d decision in detail<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Let us now take a closer look at the “make-or-buy” approach and examine the pros and cons in more detail.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Location<\/h3>

An important factor when investing in your own facility is the associated commitment to a location. Once decided, this location commitment cannot be reversed without significant costs. If it becomes necessary to relocate due to market or geographic changes, this is very difficult with a self-built facility. If you outsource to a colocation provider, however, it often operates multiple data centers. Colocation therefore offers you far greater flexibility to move your capacity to another location<\/strong>\u2014either by physically or virtually relocating the servers. <\/p>

When considering location, the costs with a colocation provider should also be taken into account. Due to the new CO2 requirements (since January 2021) and Germany\u2019s phase-out of nuclear energy, operating high-performance data centers is becoming increasingly expensive over time. These changes have even put some data center projects on hold. <\/p>

Availability of data center space<\/h3>

Globally, some markets are experiencing a shortage of available colocation space. In these cases, a company may be forced to build. In the early 2000s, this was a likely scenario. More than twenty years later, however, there is generally a good supply of data center space worldwide. Most data center providers also have locations in multiple countries and across multiple continents. Today, data center operators are building hyperscale data centers that are so large that many customers can house their equipment there and also benefit from economies of scale within a colocation environment. <\/p>

In the London market, for example, the availability of data center space has been good in recent years, with more new space being built each year. With a share of around 80% of the total data center capacity in the UK, London has a total data center supply of over 420 MW. This is almost half of the total supply in the key European markets, which also include Frankfurt, Amsterdam, and Paris. <\/p>

This creates healthy competition in the market, enabling companies to find high-quality facilities at competitive prices. In addition, companies can deploy their servers at ready-built colocation sites in the shortest possible time, which is often business-critical. If needed, additional capacity is available without wasting capacity or requiring extensions. <\/p>

Tailored specification<\/h3>

A key advantage of owning a data center is control. This includes access, maintenance, and future improvements. At the same time, however, this can also be a disadvantage: Hardware refreshes are required every three to five years. In addition, operating a data center may not be among the IT department\u2019s core competencies, which requires additional staff or OpEx. <\/p>

If a company decides to build its own data center, it has the advantage of being able to do so to its exact specifications and possibly at its ideal location. At first glance, a clear advantage over buying colocation space from a third party. In Germany, there are many planners (dc-ce, TTSP) and also contractors (Mercury, SPIE) who support customers during construction. <\/p>

However, many data center providers now build their data centers in a modular way, meaning most are located at highly optimized sites. The modular approach enables customers to help shape the design specification and fit-out of the space they purchase<\/strong>. This high level of customer involvement enables flexible customization of a purchased colocation data center. This comes close to the level of building your own environment, while also offering the advantage of leveraging the operator\u2019s expertise. <\/p>

Financial flexibility<\/h3>

Financial flexibility is an extremely important aspect when setting up a data center\u2014regardless of whether it is an in-house investment or outsourced to a third party. Setting up data centers is highly capital-intensive and requires major investment. But there are other, often overlooked costs that can add up quickly, such as fire detection and suppression and facility staffing. In addition, when expanding the facility, provisions often have to be made for growth, which makes the facility inefficient in the short term. Sometimes this results in money being invested in space that may never be used. <\/p>

Consider costs and effort<\/h2>

Beyond the pure costs, the effort required for the day-to-day operation of a highly available data center<\/a> must also be considered. Is the in-house team experienced and qualified to keep the infrastructure available for at least 99% of the year? Is someone available around the clock to handle emergencies? What about maintenance and updates to the facility and equipment? Annual maintenance costs can add up to as much as 5% of the original building costs. <\/p>

Even if it is decided that building a data center will pay for itself within an acceptable timeframe, colocation can still be advantageous. A company specializing in data center design and operations runs IT equipment more efficiently with higher power usage effectiveness (PUE<\/a>) and in a better controlled environment<\/strong>. This extends the hardware\u2019s service life. When purchasing or renting colocation space, most providers offer customers flexible contracts with terms that allow them to: <\/p>