It wasn’t so long ago that it was a common practice for businesses to own and run a data center, or at least a chunk of a data center that hosted colocated hardware. Every business with a modest deployment of servers owned and managed those servers. At the time, it was the smart choice — in fact, it was often the only choice, but we don’t live in that world any more.
With modern cloud infrastructure and data center technology, very few businesses should own a data center — a data center is a liability rather than a benefit. Of course, there are companies that benefit from data center ownership. We’re one of them: we provide infrastructure hosting services, server management, networking, availability, and scaling for our clients.
Companies who operate at massive scale also benefit from keeping data center management and ownership in-house. If you’re a Google or a Facebook, with hundreds of thousands of servers located across the globe, you need to own and manage data centers. For everyone else, a data center is not a smart investment.
Cloud technology and the cloud marketplace have advanced to the point at which it makes next to no sense to build an in-house alternative. Cloud platforms are specifically tailored to meet the needs of enterprise organizations. In the early days of the cloud, it was appropriate for companies to hedge their bets with in-house deployments, but the modern cloud presents a vast array of componentized services that can quickly and easily be composed to provide enterprise-grade functionality equal to anything a company could build itself.
In fact, cloud functionality and reliability don’t just equal what most companies can build in-house, they’re invariably superior. Scaling, automation, redundancy, and reliability: these are difficult problems, and very few organizations have the expertise and the commitment to solve them at enterprise scales.
As a consequence, an organization that tries to replicate the functionality available in the cloud is likely to produce a pale imitation. Or, they’ll build a competitive platform that costs more than equivalent cloud deployment because they don’t benefit from the economies of scale or the automation capabilities of a cloud platform.
Servers have to be bought, managed, maintained, and connected. Cloud users don’t get a free ride here: it all gets paid for eventually whether in-house or cloud, but we can do it for less, at a larger scale, and with greater reliability — we can provide each unit of compute, storage, and bandwidth far more efficiently and at lower cost.
It’s not just direct costs. Investing in a data center imposes opportunity costs. Every dollar needlessly spent on building, managing, and maintaining a data center could be better spent elsewhere: on product development, on marketing, on hiring. Unless running a data center is your business, those resources should be invested to generate revenue and contribute to the business’s wider goals.