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Is the in-house data center a thing of the past?

Cost pressure and the shortage of skilled workers are rising. In recent months, CIOs have also had to critically scrutinize IT’s security of supply. The 2023 Swiss IT Study shows the direct impact on the IT infrastructure.

IT managers are facing several challenges. The first is to lay the groundwork for a modern, data-driven company by building new platforms and driving cloud adoption. But they also need to reduce costs in the midst of increasing demands for availability and security. This is no easy task when supply chains are at a standstill, skilled workers are scarce and the focus is suddenly shifting to secure energy supply for the company’s facilities due to energy shortages. So which solutions can they turn to?  

The 2023 Swiss IT Study clearly shows that outsourcing to external data centers is set to increase significantly, with 23.4 percent of companies having already outsourced their infrastructure. In the next five years, another 20.8 percent plan to move their server rooms to external data centers and dismantle their in-house centers.  

What’s behind the outsourcing trend? 

Many data centers are outdated. Modernization steps that would be necessary for greater security, availability and energy efficiency are not feasible during ongoing operation. They are also economically unprofitable, as workloads are increasingly being shifted to the cloud. This in turn reduces the need for servers and thus the space required on the company’s premises, which usually cannot be reduced in a hurry anyway and still generates the same expenses for maintenance and operation. As a result, running an in-house data center is becoming increasingly uneconomical. 

Modern data centers, on the other hand, offer comprehensive security, high availability and greater cost efficiency, with sustainability always at the forefront. Significantly higher energy efficiency reduces energy consumption and, consequently, costs. 

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What counts in the external data center?

Data is a valuable resource. This much is certain. Comprehensive protection and constant availability are key requirements for data centers. In the Swiss IT Study, 44 percent of respondents said that external data centers are better equipped than their own installations when it comes to security and reliability. Keeping data center infrastructure up to date and having certified processes to ensure operational excellence are also high priorities. 

But does greater security and availability in an external data center mean higher costs? How can companies benefit from economies of scale? 

High availability and security for all customers 

Modern data centers are designed for high availability. These data centers are equipped with redundant power, cooling and fiber-optic connections. The supply is secured several times and independently and even the cabling is installed in duplicate and routed separately. All aspects of security are covered – from location and access, through processes and physical security, to overarching business continuity management, which provides emergency plans, schedules regular tests and regulates alternative operations. Security Operations works on site around the clock to guarantee operational security. For many companies, implementing all of this in an in-house data center would be an enormous outlay.  

The economies of scale in large data centers mean that everyone benefits, from SMEs to large public cloud providers such as AWS, Google and Microsoft. They provide a state-of-the-art infrastructure with corresponding services, which are certified according to international standards. In addition, multiple locations allow for geo-redundant solutions, each of which is situated at an ideal distance from the next and connected via a redundant fiber-optic ring. 

«By outsourcing, our customers benefit from our significant investments in security, availability and energy efficiency 
Roger Süess, CEO Green 

Companies can also choose their desired level of reliability. Do they need two data locations or are two separate fire compartments in the same data center sufficient? Are internet breakouts needed at two locations? Do different carriers and networks need to be taken into account? Are emergency workstations with an emergency power supply needed? Or how about a cybersecurity vault solution with a third, decoupled location? All of this is possible in an external data center and is set up and implemented by the experts.  

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Energy efficiency pays off 

Data center providers are constantly investing in energy efficiency: Existing systems are continuously being optimized and the results of hundreds of operational data points are incorporated into efficiency improvement programs. Plus, the buildings are designed for maximum efficiency from the outset. The design, systems, free cooling solutions and waste heat recovery all help to reduce energy consumption. Lower energy consumption pays off – both environmentally and economically. 

“Modern data centers reduce energy consumption by up to 46 percent.”  
Prof. Adrian Altenburger, HSLU study

According to the latest study by Lucerne University of Applied Sciences and Arts, optimized data centers require up to 46% less energy. Given the current market energy prices, the savings potential for companies is therefore considerable. 

Meticulously checked: What public cloud providers look out for 

International public cloud providers (hyperscalers) and large companies are investing one to two years in testing suitable data center providers. They evaluate locations, connections and networking options, and check systems, supply routes, maintenance contracts, training instructions, processes and compliance with their standards. These are comprehensive and extend as far as security of supply, emergency plans and crisis scenarios. There are only a few data centers at this level. A hyperscaler site meets the most stringent criteria in terms of security and availability. Those who provide services for demanding large customers also guarantee the necessary security and reliability for colocation solutions and cages. This benefits all customers, from SMEs to large enterprises. These hyperscaler locations have therefore been chosen as the home of the big data hubs of the future.  

For companies looking for secure, sustainable and cost-effective solutions, outsourcing to a modern and future-oriented data center is the right decision.  

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