The concept of “digital transformation” has gotten a lot of attention in recent years. It involves not just the implementation of new technologies, but the alteration of business processes and models to fully leverage those technologies. This enables organizations to gain unprecedented levels of productivity, enhance the customer experience, drive innovation and create competitive advantages.

It sounds greater in theory but in practice it’s extremely challenging. Most organizations still allocate upwards of 80 percent of the IT budget toward “keeping the lights on.” It’s difficult to transform your organization when you’re struggling to manage and maintain legacy IT architectures.

For many organizations, the challenges begin with the data center infrastructure. Aging data center facilities lack the capacity and scalability to support rapidly changing technology demands. Power and cooling costs continue to increase, further straining IT budgets. Digital transformation must start with data center transformation to ensure the right foundation is in place.

According to IDC, the average U.S. data center is 12 years old. These facilities simply weren’t designed for today’s high-density environments, with large numbers of servers and other devices and ever-increasing space, power and cooling requirements. The research firm notes that many organizations need to update the design and operation of their data center environment before they can begin implementing new systems and technologies.

Data center modernization projects should address these issues:

  • High cost and environmental impacts of legacy infrastructure
  • Complexity of data center environments that have evolved over time and grown through mergers and acquisitions
  • Greater power densities and the associated heat loads
  • Operational inefficiencies that increase costs and the risk of downtime
  • Rampant growth of data volumes, connected devices, applications and users
  • Increasing security and regulatory compliance requirements

Data center transformation can deliver real business benefits, including reduced costs and greater IT agility. That’s not to suggest that it’s easy, however. Data center modernization requires skill sets that few organizations have in-house, as well as substantial IT resources. With limited budgets and staff, many organizations are simply unable to take on a data modernization project.

The good news is that there are more choices than ever. In addition to designing and building out an in-house data center, organizations can lease space from a hosting provider, house hardware in a colocation facility or even move certain applications and services to the cloud. Each approach has benefits and drawbacks, and many organizations utilize more than one option.

Outsourcing to a colocation or hosting provider enables organizations to get a new facility online quickly, and helps to relieve the staffing challenges that plague many IT organizations. Upfront investments are lower, and well-designed facilities will offer efficiencies and economies of scale that reduce total cost of ownership. On the other hand, building an in-house data centers makes more sense for very large deployments, and facilities with a left expectancy of more than five years. In-house data centers also afford greater control over the IT environment.

Digital transformation often starts with data center transformation, but should you build or buy? We’ll examine the considerations in greater detail in our next post.

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