Know your data center site selection basics

by Sohini Bagchi    Nov 21, 2012

data center site selectionData center requirements have changed dramatically in the last few years. Earlier, the main concern in choosing a location for data center revolved around network accessibility, as fiber networks connecting data centers were concentrated in the main cities. This is still a concern. However, the growth of high-speed network infrastructure and remote access capabilities allows data centers to be built in any location. Nevertheless, selecting the physical location of the data center still forms an integral part of data center strategy, keeping in mind a lot of other factors that has a bearing on the total cost of ownership (TCO) of the organization.

“Data center location continues to play a pivotal role in deciding its operational costs and ensuring its smooth functioning. An improper data center location not only result in high operating costs but may also lead to loss of revenue due to disruptions in data center operations and in turn a lower than expected ROI,” says Kumar R Parakala, Head of Management Consulting - IT Advisory, KPMG in EMA.

Parakala believes that location decisions are also important as they may affect the information flow and operations of a data center. With stringent data security acts such as US Patriot Act, Gramm‐Leach‐Bliley Act, Data Protection Act of UK, and the European Union Data Protection Directive, to name a few, which restrict the free flow of information between geographies, the location selection should certainly take the centre stage in data center planning.

Koushik Nath, VP, Systems Engineering, India & SAARC at Cisco Systems believes that political and economic stability in a region can enormously impact the ROI of data center. “Political stability that includes stability of the government and that of its regulatory and legal norms should be taken into consideration before locating a site for building a data center. A location vulnerable to political disruptions such as civil war or terrorist attack, social unrest or natural disasters should be avoided for setting up data center,” he says.

The other consideration is power. With power consumption on the rise, blackouts are becoming a common problem in areas having poor power infrastructure. As data centers require enormous amounts of power - failure to which can cause unexpected downtime – availability of abundance low cost power is an important consideration. Companies today are looking at alternatives source of energy such as hydroelectric power and bio fuel that significantly bring down the operational costs.

Nath believes that green data centers are an obvious answer to efficient power management as environmental consciousness has become one of the key corporate parameters. Besides, data centers built in cooler climates can reduce costs because outside air can be used to keep it cool automatically as a lot of money is involved in the cooling.

Presence of business catalysts which may include state and local government incentives, IT development of the location and in some cases, proximity to business center remains other key parameters in location selections.

Despite having a highly equipped data center, and keeping some of these key factors in mind, many data center operations across the world fail and are found to be economically nonviable. According to Parakala, “The primary reason behind this is the fact that most enterprises do not define their TCO exhaustively. The most common trap is that often companies consider capital costs invested as the TCO and miss out on the cost modeling for maintenance costs, operating costs and the energy costs. That’s because enterprises often fail to build a ROI model that supports smart and rational business decisions.

Parakala believes that some of the other mistakes enterprises often commit include making unrealistic cost and ROI estimates, selecting the location without evaluating various criteria in a scientific manner and improper design planning and space planning, among others.

The CIO and data center head can play a prominent role along with other key decision makers in the enterprise when selecting the right location for their company’s data center. They should assess each parameter and the cost benefits before settling on a particular location to reap the maximum ROI.