Cisco UK & Ireland Blog

7 data centre financing challenges and how to overcome them

January 23, 2017

The business landscape in 2016 is as unpredictable as ever. Customer expectations are fast evolving, disruption is rife, and organisations have to cope with an ever-growing influx of data from all kinds of sources.

The not-so-humble data centre is at the heart of managing all that information. But in such a volatile environment it can be difficult to predict how much capacity you’re going to need at any point in future.

I recently wrote about how a consumption-based data centre financing model such as Open Pay can help overcome this issue.

In this post I’m going to explore seven ways flexible funding can help maximise value and utilisation in your data centre.

  1. Coping with burst demand

Seasonal or periodic spikes in capacity need – what we refer to as ‘burst’ demand – can cripple you if you don’t have a proper contingency plan in place.

Historically companies would simply buy much more data centre capacity than they think they’re going to need, effectively giving themselves a ‘buffer’ should any unexpected hikes in demand appear.

But while this approach technically works, it inevitably means you’re paying for data centre assets you may never use.

Working with a consumption-based model, however, means you can prepare for any unusually high capacity requirements without having to fund it up-front.

Put simply: you pay for what you use and nothing more.

  1. Supporting a growth environment

Anyone who has worked in a high-growth business will know that it presents as many challenges as it does opportunities and rewards. Arguably more!

When it comes to data centre storage and compute, the issue is that even when you can predict growth you can’t necessarily predict precisely when it will happen.

So you either have to pay over the odds for data centre assets you may or may not need, or risk falling short at a critical time and losing out on opportunities.

The best way to overcome this challenge? Fund your data centre through a flexible approach that lets you keep ‘buffer’ assets to be paid for as and when you need to use them. This can also have a positive impact on cash flow, of course.

  1. Speeding up time to delivery

I’ve talked about high-growth businesses, and in any fast-developing environment there is always going to be increasingly large demand for assets of all kinds both externally and internally.

The risk in operating a traditionally financed data centre is that when those demands arise it can be difficult or even impossible to deliver the additional capacity in a timely manner.

If you have additional assets sitting there ready and waiting to be used, however, you can draw upon them when requests for extra space come in. And you can do so relatively quickly.

  1. Security and privacy concerns

Many organisations want the benefits of public cloud, but at the same time they’re worried about heightened risks around security, regulation and compliance.

This is hardly surprising given the number of high-profile data breaches we’ve seen in recent years. Companies are naturally keen to keep security risks to a minimum.

Using an on-premise private cloud solution can go some way to addressing those concerns, while still delivering many of the traits that make public cloud so appealing.

  1. Managing operational risk

As I mentioned above, a growing business brings with it a number of problems.

One such problem is that when you add additional capacity to your data centre you potentially increase the associated operational risk.

That risk could come in any number of forms – physical touches, coordinating maintenance or the need for constant upgrades being a few common examples.

If you only increase data centre capacity as and when it’s needed, however, you massively reduce the need for ongoing maintenance.

  1. Testing and developing

All enterprises worth their salt should be constantly testing and developing their technology, and in the 21st century this has become a key part of the IT department’s function.

But when you view this from a data centre capacity point of view, it presents something of a problem.

You have environments that are only very occasionally used, but you still need have the capacity in your data centre to work with those environments when needed. And so you end up paying for storage you hardly ever really use.

But a consumption-based model means you can simply pay for the extra capacity whenever one of those test or development environments is required.

  1. Flexibility for shared services

The consumption model lends itself well to building shared services that can be used in a flexible way.

You pay for your initial capacity requirement and use that to build a particular service. Then you have additional data centre capacity that can be drawn upon whenever an area of the business needs to use that shared service in future.

Again, this is much more economical than simply paying for a data centre asset ‘buffer’ up front that you might never actually need.

Check out Cisco Open Pay if you want to know more about flexible data centre funding without limitations.

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