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In-house data centre vs outsourced data centre: pros and cons

Marco Cavadini - Jun 1, 2018 12:02:00 PM

IT infrastructures play an increasingly important role in businesses since the last few years.

Companies are now obliged to respond with innovation and digitalisation to the needs of an increasingly demanding consumer. The world of digital connections, the automation of processes and the creation of customized products and services are all innovations that are becoming more and more based on data.

Collecting data is the foundation. It’s at the base of everything. But where and how do we collect data? This is a critical choice that not only IT managers, but even CEOs must ask.

The way data collection and storage is done in an organisation will inevitably have a direct impact on your company's business continuity. At the same time, it will also affect the company's ability to use this information to generate profit.

There are two main alternatives for you: building the data collection centre in-house or outsourcing the infrastructure externally by relying on a specialized supplier. In the latter, we refer to outsourced data centres.

But let’s take a more practical approach. Here are the the pros and cons of the two.


Are you thinking about outsourcing your data center? Download our guide "The 10  criteria for selecting a data center" to understand how to choose the perfect location!


Pros and cons of an in-house data centre


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  • Greatest control over the infrastructure. Data is most likely collected in the same premises as where the company is based. Naturally, this generates more trust in people who are used to having everything "in house". Many small businesses still perceive the distance from the physical data collection site as a risk. However, the risks related to the location of the infrastructure are more an illusion than a real problem.
  • A company that has data as its core business, or need large volumes for storage, may find it more advantageous to build the infrastructure themselves, especially if they can exploit the economies of scale on their own, without needing third parties.


  • Building such an infrastructure from scratch means incurring a long-term investment, with significant impacts on capital expenditure, and will be paid over decades.
  • Ensuring business continuity isn’t simple. There will be technological, personnel management and security matters that shouldn’t be managed solely, especially for smaller infrastructures and organisations.
  • Extreme rigidity of the infrastructure; increasing storage space will require new costs that can be easily afforded by at least a medium-sized company.


Pros and cons of an outsourced data centre


  • Outsourcing your data centre means relying on qualified professionals, that offer the same services to many customers. As a result, all operating costs, from the technology required to the cost of energy, from human resource costs to video surveillance costs, will be shared among several companies and will be significantly reduced. This is the magic brought by economies of scale.
  • Capital expenditures will be significantly smaller: it will no longer be a matter of planning an investment with a 20-25 year horizon but of renting a storage space.
  • Qualified IT staff, often difficult to find especially in small and medium-sized companies, will be "freed" from the task of managing the infrastructure and will be able to further dedicate their time to daily support of the business.
  • Though not mandatory, if we consider the best colocators on the market, they will certainly be certified in compliance with security regulations and standards (such as ISO 27001 Information Security Management) - a plus which ensures the security of your data and provides a better guarantee of reliability for customers.


  • Your choice of a supplier is obviously crucial. Relying on the wrong company can cause significant damages. What should you keep in mind then when going through the selection process? Certainly the credibility of the supplier as well as their technical capabilities and characteristics such as vendor neutrality and the ability to ensure business continuity. In this regard, there are four levels (Tiers) of infrastructures. Look out for at least Tier III which guarantees 99.98% continuity within a year.

Furthermore, in the case of multi-site solutions, data centre security can be further increased by making use of geographically-distanced, redundancy solutions. In this sector, redundancy means duplicate and distributed systems that will help you avoid the risk of data loss when they’re all located in one place.


In conclusion

Choosing an outsourced data centre is the best strategy for medium-small companies that don’t deal with data as their core business.

This choice offers more flexibility and greater security at low costs. Keeping your data centre in-house could be a decision made out of fear and misconceptions than by real warning signs.

However, outsourced data centres aren’t just for small and medium-sized companies. There are relevant examples of large international players, especially large banks, that have chosen to outsource their IT infrastructure, entrusting the service to high-level professionals.


the 10 selection criteria for outsourcing


Categories: data center