Mosaic NetworX > Blog > 5 Reasons Why Building a Datacenter Yourself is a Terrible Idea

5 Reasons Why Building a Datacenter Yourself is a Terrible Idea

Not long ago, the concept of building a data center from scratch seemed like a great idea. Many businesses that are starting out believe having their own data center services will give them greater control over their IT organization.

B Many businesses have learned the hard way, by leaping into building a data center from scratch. Data centers are expensive, resource intensive, and rarely profitable. Reread that last part, because it’s the most important: the economics of data centers rarely match up with anticipated costs in the planning phase.

In order to avoid falling into a financial hardship with an impulsive IT investment, we’ve provided you with detailed explanations of some common consequences. Here are five reasons why building a data center from scratch is often a terrible idea.

1. It is too expensive.

First and foremost, the cost of a data center of any size is impractical if your intention is to use the associated processing power and storage to service customers. It’s a classic “chicken or egg” problem: to get customers using your servers to store their data and run their applications, you have to have the hardware up and running. However, investing in that hardware takes customers who pay for data center services. The way to break out of that cycle is to use “other” money. That includes money raised from investors, bank financing, or revenue generated from other offerings. Allocating this capital to a data center is foolish, particularly when it can be invested in other, more profitable parts of your business.

2. It’s not a profitable investment.

You’ve heard the saying that a car loses one-third of its value the moment you drive it off the lot? That adage is similarly true for server hardware and storage technology. In fact, racks and enclosures depreciate even more quickly than your auto investment. If you invest in the newest cutting edge technology for your new data center today, it will be worth considerably less tomorrow–and it’s only going to depreciate more as time goes on. In three years, you’ll likely be considering one of many hardware refreshes, and you’ll be stuck with trying to sell obsolete hardware while allocating big bucks for new, state-of-the-art gear.

3. It’s too resource heavy.

People who have never worked in data centers don’t understand the raw resources required to keep the data center functioning at an optimal level. You’ll need in-house network engineers available to service not just hardware, but also network cables and other associated infrastructure at a moment’s notice should something go awry. Considering the power needed for the server hardware in conjunction with the air-conditioning and ventilation required to keep things running optimally, your electricity bill will be one of the largest checks you write each month. Even the broadband connectivity you’ll be charging your clients for is a significant expense since you have to maintain it in pursuit of the ever-elusive “five nines” uptime.

4. You will have to buy it twice.

What most businesses don’t realize when they start building a data center from scratch is that, effectively, they’ll be paying for their data center twice. Let’s say you have already forecasted and worked out a plan wherein you are able to generate positive cash flow for your organization. Assuming your math isn’t wrong (which it can be, due to unforeseen variables), it won’t matter anyway. Because in three years, one of two things is going to happen.

The first scenario:

If you are lucky, your data center will be operating at full capacity, which means you’ll have to build and buy a new data center with new hardware, all while your current data center is running. At this point, you’ll likely be due for a hardware refresh, and you’ll need room for growth and expansion.

What? You thought you’d tell all your customers that you were taking their needs offline while you sold all the old hardware, brought in new hardware, configured everything, and got your data center back up and running? If you thought that building the first data center was difficult, wait until you have to build the second one and transition everything over in an orderly fashion, all while continuing to offer services to your clients.

The second scenario:

The other possibility is that you won’t be running at full capacity, which means you’ll be required to pay to refresh hardware that, to some degree, isn’t being used to its full potential. In fact, there are many prominent examples of high-profile businesses that found themselves in this exact situation.

5. There are significantly better options available.

Thankfully, you don’t have to waste time and resources building a data center from scratch. Today’s business landscape is defined by diverse supply chains populated by enterprises that specialize in one or a few niche data center services. Data center management is no different, and you can easily gain a competitive edge by working with a reputable business that can source and manage your data center services. There are an extraordinary number of options available for companies that need the functionality of a full data center but are wise enough not to build their own. Consider the following:

  • Cloud service offerings give customers workable server and storage instances with high-level support and reasonable per-usage pricing.
  • Existing data centers offer customers a chance to lease existing hardware for almost every use imaginable, from storage to application hosting.
  • Colocation facilities offer hybrid models where you can bring in your hardware but utilize their bandwidth, electricity, space, and technical staff to create a custom solution that fits your needs.

One thing is for certain: you don’t have to spend a huge sum of money or experience the significant frustration that comes with building a data center from scratch in order to have dependable, efficient data center services. By partnering with an organization like Mosaic NetworX, you can have a robust server environment without the stress of data center logistics.

If you’ve decided that you need more server power or better storage options, but you aren’t entirely sure what option is best for you, contacting the experts at Mosaic NetworX can be a great first step in finding the right solution for your company. Visit the experts at Mosaic NetworX!



  1. Lindsay December 13, 2013 at 2:47 pm - Reply

    This article is so on point. I have worked in business to business sales for years, a lot of it being enterprise, and I couldn’t believe the
    amount of people who had unrealistic expectations about building and maintaining a data center. They felt that managing their own would enable the business to operate much more functionally, but
    they weren’t willing to hire the manpower to ensure that it was maintained. They also spent thousands of unnecessary dollars on hardware that they really didn’t need. The company I worked for offered many online cloud solutions so I always tried to recommend those as an alternative. Unfortunately there is still a bit of an old school mentality, and people don’t trust “the cloud”. Companies are now offering “all in one” solutions for your business that include
    software licensing, file storage, file sharing, and more. It makes so much more sense to use one of these services, than to invest money into equipment that needs to stay up to date with an ever changing economy.

  2. Joseph Gordon December 17, 2013 at 2:47 pm - Reply

    I would beg to differ. Though maintaining a data center is extremely costly, not maintaining one would defeat the purpose an organization stands for – data integrity. Cost is an essential factor but its too risky to avoid investing it in a data center especially if the organization is huge and spans across the globe. The recent spying attacks by US government has clearly exposed how vulnerable cloud can be. Trusting a 3rd party cloud service to handle complex, highly confidential client data is calling for trouble. Data centers are a must for any organization!

  3. […] because our revenue recognition software has, among other things, reduced our IT spend, including eliminating our need to build a data center to support our hosted […]

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  6. Michah June 24, 2015 at 5:39 pm - Reply

    Our company has 16 data centers in 3 buildings. We call a room (50×50 floor tiles) that houses equipment a “data center”.

    We refresh every 5 years and are constantly adding storage and servers to grow. If you plan it right, you can do it while still earning a profit.

    Your article suggests that the person implementing the DC has no knowledge of operating one and you may be on point with that. We are a very dense data center, 10:1 virtual, and we have very happy customers storing PB of data.

    Key things to take away:
    – Plan plan plan!
    – Know long before when you have to build another data center as it can take several months to build one out.
    – Consolidate as much as you can before you have to expand
    – Use old tech refreshed hardware to run your corporate infrastructure (its still good and should be supported by vendor for another 3-5 years)
    – Work with your vendors and partners to get the best possible pricing

  7. H0ly May 8, 2016 at 5:51 pm - Reply

    It really depends on the type of environment that you are planning to run! I believe if you are looking towards building applications that will require the highest standard of security, then it makes sense to leverage a private datacenter, so you can keep all access points to your data within only your company. At end of the day, I guess it really depends on how much money you are willing to risk for next 1/3/5/10 years.

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