How to Choose a Data Center

Business owners need to be knowledgeable about the potential risks and rewards of using the services of a data center to back up their files.

Five years ago, executives at Journyx, a provider of Web-based time, expense, and project tracking solutions, learned a tough lesson about how all data centers are not created equal. The Austin, Texas-based company — which hosts software-as-a-service applications for 50 percent of its customers — was outsourcing some of its data needs to an offsite data center when that company was acquired by another firm. The new owners decided to close the facility Journyx was housed in and move clients across town to a “better” data center.

“That should have been a red flag right there,” recallsCurt Finch, CEO of Journyx. “You never know when a company is acquired if the new company is going to have the same culture and take care of customers the same way.”

To make a long story short, the new data center didn’t take care of its customers the same way. Finch and other company officials found that out the hard way shortly after Journyx endured an arduous move to the newer facility. The data center committed the cardinal sin in the Internet age: the company shut down all physical and logical access on a Friday afternoon because one of its collocated data customers contracted a computer virus. The data center didn’t bring its clients back online until Monday morning.

At that point Journyx decided to look for a new data center. It’s a search that a growing number of mid-sized businesses are undergoing as they increasingly look to outsource data needs, instead of building costly new data centers on their own in a time when capital is short and energy costs of cooling and maintaining data centers are rising. Outsourcers can often run more cost-efficient facilities, as they take in many clients, often to “collocate” their servers at the shop, and invest in more energy efficient technologies, such as energy-efficient hardware and server virtualization.

Knowledge is power in business, and information is the key to unlocking that power. But many businesses grow to the point that they no longer have the capability to house all their data. At that point, it’s time to unlock the doors of an outside data center. The following guide details how companies should go about choosing a data center, what criteria they should use, and how to avoid making costly mistakes.

Understanding Your Data Needs

Before starting to look for a new data center, it’s important to understand the type of IT environment a company has relative to their infrastructure and applications — in other words “what they run and what they run it on,” says Ralph Presciutti, a partner in the technology practice at Tatum, an executive search firm. You are going to want to look for a data center that best matches the company, relative to the types of hardware and software the outsourcer supports and the types of IT infrastructure on which you run your company.

In addition, you also need to get a handle on your data needs. Many companies hire consultants to help them make these assessments and find the right match. Data center needs are often calculated in terms of real estate: how much square footage of space you need in the data center to house your infrastructure. That may be 100 square feet or 1,000 square feet or more. Companies will often base their charges on square footage, among other calculations.

Next, you need to determine what types of services you need from the offsite data center.  Here are some of the different models:

•    Collocation. If you have your own servers and have just outgrown your in-house data center, you may just need more space to house new servers and network equipment, Presciutti says. Or it may be that your data center needs have expanded beyond the abilities of your HVAC system or power source to properly cool your data center. In both cases, you probably want to look for an arrangement under which you provide the hardware and the data center provides you space and power to keep your equipment running 24×7.

•    Managed services. As your business and your data needs grow, you may not want to hire more IT personnel to manage equipment and applications and infrastructure. That’s where managed services come in. Some data centers allow you to provide the hardware and assets, but they manage everything for you. “They take care of the hardware fixes. They make sure you have network connectivity. They manage up to the virtual environment or the operating system level,” Presciutti says. Some managed service providers allow the hardware to be located in-house or at another site.
•    Cloud computing. Another model that is becoming more appealing to growing businesses is to outsource everything to a cloud computing provider. “You don’t have to buy anything,” Presciutti says. “You use their servers, their storage and their network, and it’s a pay-as-you-go model or a utility-type computing model.”

Considerations in Choosing a Data Center

When you set out looking for a data center to match the needs of your business, you may put out a request for proposal or network to find names from other companies or conduct onsite visits. Here are some of the factors you should consider when selecting a data center:

•    Liabilities and risks. What type of disaster plans does the data center have in the event of a hurricane or fire? “If a tornado comes ripping down the Interstate, what is this data center’s answer to that?” Finch says. If you’re going to collocate and put your equipment in that facility, you need to understand the liability and risks. If they tell you they have insurance, make sure you ask how much. “If their response comes back that you need to have insurance, you may want to keep looking,” Presciutti says.

•    Experience, qualifications, and references. Perform due diligence on the company to make sure that you are getting a good match to meet your needs in a data center. Ask for references and then make sure you contact them.
•    Location. If you are collocating, you may want to consider the location of the data center in connection to the proximity of your IT staff.
•    Uptime. These days, a growing number of businesses want to be able to access data whenever and from wherever. And if your business involves hosting data for someone else’s business, then your reputation is at stake if you can’t provide something on the order of 99.9 percent uptime. Ask about proposed maintenance plans or issues that might impact uptime and how often they have service interruptions.
•    SAS-70 Certification. This auditing standard developed by the American Institute of Certified Public Accountants (AICPA) requires an audit of controls, including over information technology and related processes. Your business may be required to use an SAS-70 data center to win certain clients in industries that are regulated. “Our software has to be SAS-70 compliant,” Finch says. “So our collocation center has to be SAS-70 compliant.”
•    Power. One of the most fundamental considerations is that the data center won’t run out of power and will have plenty of HVAC capacity to cool the center to ensure that hardware performs at optimal levels. Ask about power cooling density, a metric that indicates how much square footage the center can cool at maximum capacity. Also inquire about backup power supplies, such as generators, and how often those generators must be used.
•    Contracts and SLAs. Before committing to anything, review the contracts and service level agreements carefully. With thousands of data centers to select from in theU.S., these can vary considerably. One sign of a company that stands by its promises is if they agree to penalties for not meeting certain service levels.
As with any company you do business with, you also want to make sure that the data center you choose is run by a reputable company. “You want to understand that the corporation running the data center is financially solid and not going to get bought by another company in the next nine seconds,” says Finch. “I would avoid companies that refuse to reveal their finances. You should be able to ask: What was your revenue last year? How much cash do you have in the bank? And can you show me your financial statements?”
Dig Deeper: Is it Time to Toss Your Servers?