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Thinking of Building a Data Center? What About the Cloud?

Publication date: 28 September 2021

Nowadays, basically every company gathers tremendous amounts of data. All that data has to be stored somewhere. Even in today’s cloud-driven world, there are still plenty of companies that build their own data centers – server hardware on company premises used to store and access data through the company’s local network. 

But, how much of a cost-effective alternative to setting up and running a data center lies in the cloud exactly? Is it really always a better approach to simply “store it in the cloud”? Do the physical data centers have advantages that the cloud simply cannot make up for?

In this article, we explain in more detail the difference between building a data center and storing data in the cloud.

server racks on data center
Photo by Brett Sayles on

Let’s start with the basics.

What is a Data Center?

A data center is a facility that houses servers and/or data storage for a company. 

This comprises the hardware, the environment in which it is kept, the power and backup systems, environmental controls, and anything else required to keep the servers working. 

A data center might be as simple as a single server or as complex as a rack with hundreds of servers.

What is Cloud Data Service?

Cloud data services allow companies easy access to data through the internet. A cloud data service can be described as a remote data center that is located away from the company’s physical premises. 

Cloud data centers have their own physical hardware, which is maintained and run by the cloud provider. Clients then run their applications and manage their data within a virtual infrastructure on the cloud servers.

Data Center vs. Cloud Data Service

Even though data centers are a reliable method for storing data, they do come with several flaws. 

First of all, physical space is required to store all the hardware. In addition, data centers need to be maintained regularly, meaning that the company has to hire IT experts and keep them on company payroll for the data center to function properly.

With a cloud data service, the cloud provider is in charge of maintenance and updates. 

Unlike data centers which require a substantial capital investment in hardware, companies only pay for the portion of the hardware they use if they choose the cloud. Also, a data center incurs additional costs for power, environmental controls (HVAC), regular upgrades and tests, security, etc. With a cloud provider, these costs are built into the monthly subscription fee structure.

However, the most significant advantage of using the cloud remains scalability. 

A data center has limited capacity, and whenever a company needs to expand its storage, more equipment needs to be purchased and installed. 

A cloud data system has potentially unlimited capacity based on your vendor’s offerings and service plans. All resources are scalable with use and need.

Cloud-based technology has revolutionized the enterprise world, allowing businesses to efficiently retrieve and store tremendous volumes of data. If you’re looking for the most efficient data estate solution for your business, HICO-Group is here to help you out.

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