If you’re considering hosting your web application in your own data center, you might want to think twice. While owning your data center might seem like the best way to keep your data safe and under your control, it can be more trouble than it’s worth. The costs might also be much higher than you anticipated. In this article, we’ll explore the advantages of cloud hosting over owning your own data center and why you should consider hosting your web application with a cloud hosting provider instead.
Table of Contents
- The Cost of Owning a Data Center
- The Hassle of Managing a Data Center
- The Risk of Data Loss or Downtime
- The Benefits of Cloud Hosting
- Conclusion
The Cost of Owning a Data Center
Owning a data center can be expensive. You’ve likely already anticipated your upfront investment in hardware such as servers, firewalls, network cables, network switches, and drives. You’ve also likely pinpointed the basic ongoing costs like rent or real estate, and network fees. But there are many other costs that go into owning a data center you might not have considered.
There are additional costs associated with running your own data center, even if it’s just a section of your existing office reconfigured to be suitable for servers.
Cooling/Heating
One of the main costs of running a data center is proper cooling and heating. An industrial data center will be temperature controlled throughout the building to account for each season. In addition, data centers are configured so that there is a hot side and a cool side. The hot side is the area that is heated by the servers emitting heat from being on 24/7. The cool side however is a constant blast of air conditioning designed to keep the servers cool and prevent them from overheating which would impact performance and potentially lead to downtime. Most offices or buildings would need to incorporate this heating/cooling configuration, especially if your server stack grows.
Staff
If you do plan on maintaining your own servers or data center, you will likely need to hire extra staff. At minimum you will need a systems admin which on average makes $67,000 per year. In addition, if you are running a larger stack, or a stack in another building such as a miniature data center, you will likely need to hire at minimum a single data center technician if not more. Salary ranges for data center technicians are $50,000 – $80,000 per year depending on skills, experience, and location.
Put together, at minimum you are paying a base of $5500/mo for a systems admin year-round to administrate your servers (not including benefits and training!). An additional $4150/mo for a data center technician should you choose to have dedicated real estate for your servers. Put together you are looking at $10K per month in salaries to run your stack! At this amount you would easily be able to find a cloud provider that can host your application within that amount.
Regulatory Certifications:
Depending on the sensitivity of your data, you will need to apply for regulator certifications. If you are in the medical industry, HIPAA is almost surely required. If you process payments, you will likely need PCI compliance. The certificates themselves are usually relatively inexpensive on their own (About $1K each), but to convey legitimacy to both customers and regulators, you will need multiple certifications. These certifications must regularly be updated every few years. The audit process alone can cost 10s of thousands.
Should you be audited and charged with violations for regulations like HIPAA, the cost of each violation (there are usually multiple) can be up to $50K!
A professional data center has already been inspected and awarded with certifications. These are regularly updated and available to provide to your clients on demand.
Hardware Refreshes
Though you may realize intuitively servers don’t last forever, so many organizations make the mistake of running old hardware for too long. To the point that it becomes very difficult to eventually upgrade. Many businesses then end up either moving to the cloud, or completely replacing their entire stack with the additional help from consultants.
It’s recommended to replace servers every 3-7 years, and depending on your application will likely lean closer to the 3-year mark. Unlike other devices servers remain on 24/7 which ages silicon much faster and increases failure rate. To put that into perspective it’s like buying a car and driving cross country every week for business trips. A car that might have lasted someone else 7 years may only last you 3 as you hit your miles threshold.
Refreshing server hardware in total can cost 10s of thousands of dollars. Not to mention you will have other hardware related costs such as replacing failed drives (which is common).
Network
The cost for enterprise-grade fiber network is not the same as what you would pay to connect your home or local office. Data-center grade internet often costs anywhere from $400 to $10K per month depending on your required bandwidth. If you’re just running a closet server in your office, likely upgraded internet closer to the $400 mark may work to connect your office. But if you are running a data center in a separate building then connecting to a bigger data center with 10G connection, you could easily look at $5K+.
Network costs have been going down and this has been passed on both to businesses picking their own carrier directly or choosing to host their application in the cloud or in a data center.
The Hassle of Managing a Data Center
Managing a data center is a full-time job. You’ll need to monitor and maintain the servers, troubleshoot any issues, and upgrade equipment as needed. You’ll also need to ensure the data center is secure and compliant with industry regulations.
What this means is that you will need to have an employee monitoring your stack full time. They will need to make sure all hardware is operational, all applications are up, security is maintained, hardware is catalogued, and more.
Normal day-to-day operations of your on-premises data center usually isn’t a problem. The challenge is when things go wrong. Let’s say you are hit with a power outage that knocks out your systems, do you have a power redundancy plan? What about when you haven’t met compliance? Do you have the people to communicate an audit? Or let’s say an employee has gone rogue and are a security threat, are you ready to have difficult conversation or threaten potential legal action?
The point is that there are so many things that can go wrong when maintaining your own data center. There are lot of issues that could end up bottle-necking smaller, more limited organizations. Ultimately, it can be a great hassle to maintain a data center, and after all emergency costs are considered it’s unclear whether there is a payoff.
In contrast, going with a professional data center or cloud host means that your organization isn’t responsible for anything at the data center level. If you choose to utilize a professional data center you will still be responsible for your hardware, which would still require a systems admin. On the other hand, if you choose a cloud provide you are only responsible for managing your virtual server and application.
The Risk of Data Loss or Downtime
Downtime can be incredibly costly for businesses that rely on their web applications to operate. When your web application is down, you are unable to serve your customers, which can result in lost revenue, damage to your reputation, and increased costs associated with resolving the issue.
The cost of downtime varies depending on the size and complexity of your business, but even a few minutes of downtime can have a significant impact. This article from [Pingdom](https://www.pingdom.com/outages/average-cost-of-downtime-per-industry/#:~:text=Relatively small businesses’ cost of,for just a short outage.) illustrates that businesses could lose anywhere from $130 – $16,000 per minute from downtime!
One of the main costs associated with downtime is lost revenue. If your web application is down, you are unable to generate sales or serve your customers, which can result in a significant loss of revenue. This can be especially damaging for businesses that rely on e-commerce, as every minute of downtime can result in lost sales.
Downtime can also have an impact on your reputation. If your customers are unable to access your web application, they may become frustrated and turn to your competitors. This can result in a loss of customers and damage to your brand reputation.
In addition to lost revenue and damage to your reputation, there are also costs associated with resolving the issue. This includes the cost of hiring IT professionals to diagnose and fix the problem, as well as any costs associated with restoring lost data or rebuilding damaged systems.
In contrast, while downtime can (and will) happen when utilizing a professional data center or cloud host, it could be far less common than if you run your own data center. This is because the data center or cloud you host with will haver professionals that monitor your server 24/7 to minimize unexpected downtime.
The Benefits of Cloud Hosting
When move beyond the initial upstart costs and consider the cost of running your own data center in its totality, there’s a strong argument for simply choosing to go with a cloud provider.
Cloud providers are incredibly accessible. All you need to do is open an account account with a hyperscaler, or seek out your local host if you need more support. Prices can be as low as $5/mo for a basic server up to thousands per month for powerful dedicated stack. But all the costs previously discussed are all factored into a single bill that you pay each month or year.
Cloud providers are also incredibly flexible, both in your current configuration and future growth. For example, let’s say you need to add additional RAM so that your application can handle more users. Simply tell your cloud provider to add more RAM, they already have the resources. Similarly, when the time comes to finally upgrade your stack, The scalability of cloud providers is unmatched. your cloud provider will have servers ready and waiting for you within 24 hours.
Finally, you don’t have to worry about any of the logistics like hiring additional staff, finding your own network carrier, depreciating hardware, swapping bad drives or anything. You just need to focus on is creating a great application that your users enjoy.
Conclusion
While owning a data center at first seems like a great way to own all your assets and control costs, it’s a lot more money and trouble than it might seem. Cloud hosting can offer significant savings, hassle-free management, and peace of mind that your data is secure and compliant.
ZebraHost hosts our cloud in Tier III data centers with the 11 most important certifications. We have clouds ranging from inexpensive virtual servers to powerful dedicated servers. We also have 20+ years of history working with clients, big and small, to build bespoke solutions depending on commitment level.
If you are in need or reliable cloud hosting, contact our team today to learn more.