Selecting Data Center Providers Based on Ownership, Management and Financial Strength
Outsourcing data center services for any company is a key decision. One will always looks for a long-term relationship with the provider; so, it is really important to know exactly:
- Who owns the data center before arriving on a decision?
- How long have they been in the data center business?
- What is the professional background of the data center management team?
- What is the total number of data centers operated by the company?
- How financially stable is the provider?
- Who are their financial investors?
- Are they for sale now or in the near future?
- What are their growth targets?
The answers to these and similar questions will eventually determine which provider can serve the company needs and can be trusted for long business relations. Knowing the answers to these questions are a “must have” before selecting data center providers.
Know The Data Center Provider’s Core Business
It is important to know as much as possible about the data center owners. What is their primary business? Many of the colocation providers may be offering services other than their colocation or cloud services. How successful is their other business and could it provide a financial drain on the data center services? Owners having a business primarily in data center industry will have a clear edge as they will be spending more equity and finances on their primary business.
Data Center Real Estate
Another aspect that should be looked into is whether the data center provider owns the real estate or do they lease it. If they lease the property, what was the original term of the lease and how many years do they have remaining on their lease? Are there options to renew the lease? From a financial perspective, is the data center provider you are considering cash flow positive or are they still in a negative cash position concerning the underlying lease? Is the owner of the property involved in maintaining the core infrastructure or are they just a real estate investor? Making an educated decision between selecting data center providers that own their property verses leasing it is an important factor to consider. Know the details.
Data Center Management
An experienced and professional data center management team will run the data center operations more efficiently. It requires multiple skills in the areas of IT infrastructure management, operations and equipment management, resource management, energy management, and building management. The longer the duration of time that the ownership and management of the data center is in place, the more likely that the company is stable and run by well-trained and experienced professionals. This can also be verified by the feedback and testimonials of existing and previous customers for the provider as this will really reflect the performance of the management team. Asking for referrals from existing customers and names of companies that have left the data center can yield a tremendous amount of information about the colocation provider’s management team and processes.
Data Center Operator Financials
Take the financial stability of the data center provider into account and feel confident that the provider has the necessary capital to replace equipment or build capacity in advance of growth requirements. Are they privately owned or publicly traded? The financial stability can be verified from quarterly/semiannual/annual financial reports, balance sheets, income statements, liabilities, mergers and acquisitions, and financial history. It is also important to know what type or who are the financial backers? Whether they have the necessary capital to invest into equipment and hardware refreshes? What their annual audit reports talk about? Is the provider in the process of any merger or acquisition? The answers to these questions will provide an opportunity to make a wise decision in selecting data center providers based on their financial stability.
Data center services are usually long-term commitments. No one can afford the added cost and business disruption that comes from moving to another location because of a bad provider decision. Ideally, the data center providers should be able to support and provide financial strength for many years to come without fearing their closure. Be sure that the data center provider can assure its financial stability and a provide a track record of client satisfaction with detailed references.
Just remember, “The Bitterness of Poor Quality Remains Long After The Sweetness of Low Price is Forgotten.”
www.DataCenterAndColocation.com is a free service provided to clients for selecting the right data center, colocation or cloud facility for their requirements. DataCenterAndColocation is one of the largest colocation site consulting firms in the United States. They represent approximately 3000 data centers, cloud and colocation centers. At no cost to clients, they identify specific space, location, power and security requirements, solicit proposals, professionally analyze the responses, compare the strengths and weaknesses, negotiate pricing and deliver highly competitive bids for colocation. They also perform comparative analysis for in-house vs. design build services, wholesale data center space and data connectivity.