Numerous online resources exist to determine if building or retrofitting a data center versus colocation is right for you. Companies can expect several benefits from either scenario. In most cases, leasing data center space is going to outweigh benefits from building/retrofitting. Let us explain.

Predictable CostsColocation facilities provide services for a monthly fee, which are operational costs spread over many years instead of a large expenditure upfront. Your terms are negotiated at the onset with no surprises over the life of the contract. Running your own facility may result in unforeseen maintenance costs and result in a surge of costs during equipment refreshes.

On-Demand Capacity and Scalability – The process of bringing on additional capacity within a colocation data center is faster, cheaper and ready to activate at a moment’s notice.

Better Access to Space and Power – Third-party data centers manage and operate data centers as their core business. This provides access to enhanced purchasing power with more competitive rates on space, utility rates, power and cooling infrastructure.*

Expert Management – Colocation providers are experienced and highly skilled at operating data centers. You benefit from this core focus and expertise, which you may not have on staff. It also provides you with optional managed services including monitoring and remote hands and access to other IT services partners.

Benefits of Building

Companies requiring more control over their data center environment will have the internal staff and resources to maintain and operate all aspects of the facility. Building your own data center provides control over every aspect from visitor access and maintenance activities to power and cooling efficiencies. You reduce your risk of losing a lease and can access existing space already owned by your company.

Key Issues in Lease vs. Build

Lease Build
Capacity Scalable Fixed
CAPEX Not Applicable $10-15,000 per kW
OPEX Set by Contract Varied
Go-Live Time On-Demand 1-2 years
Resources Included Internal or Outsourced
Latency Built-in Redundancies Dependent on carrier
Downtime 100% uptime SLA Unknown


Data Center Houston

*Build or Buy? The Economics of Data Center Facilities (Forrester)