Servpac Blog

Building vs. Buying Data Centers

on Jul 18


As businesses grow their operations, so does the need for IT infrastructure. When their own network can’t keep up with demands, they are tempted to build their own infrastructure that provides complete control over performance. What they don’t realize is that they also need a reliable infrastructure that supports security compliance, testing, and other applications, but that comes with a hefty price tag. So why is building a data center so expensive? Let's look at all the overlooked costs that add up very quickly.

1. Construction Costs


There are major costs involved in designing and building a data center that meets your business’s needs that includes the following - planning, permitting, engineering, power construction, and environmental controls. If you decide to use an existing structure, it still costs money to do renovations that meet permitting and security requirements.

2. Power Costs

Industry standard data centers are required to have multiple power and cooling paths with redundant parts and generators. This is the largest cost of owning your own data center, accounting for 70-80 percent of the total costs. This can also be more expensive based on the region the center is located in.

3. Hiring IT Staff


Any data center requires multiple qualified staff members to monitor and maintain the hardware and network. This is the second largest expense after power because it requires dedicated and responsive staff members to do 24/7 monitoring, on-site maintenance and equipment upgrades. Businesses also pay additional costs for staff members' healthcare, 401K, equipment, licensing and training.

4. Security Compliance

Another cost is security certifications as well as the requirements and processes that need to be in place. Businesses will have to make major investments in their physical infrastructure and security to be compliant with SSAE16 and HIPAA compliance. There's also other costs to have the facility inspected and all the center's processes audited regularly for security compliance.

5. Redundant Connection

Fiber connection is not cheap with costs up to $250,000 per mile of valuable fiber optic cables. Bandwidth has to be redundant to ensure high quality service and continuity.



The Benefits of Colocation

For most businesses, colocation is a better alternative that meets the needs of scalability, reliability and security without the massive price tag from owning a data center. Also known as a colo, colocation is a data center where businesses rent space for their own hardware. Third-party businesses provide the building, power, connection, and security, while businesses use their own servers and storage. Choosing this route over building your own data center offers the following benefits.

1. Cost-Effective

Setting up and maintaining availability, continuity, security, and scalability on premise can be expensive. In a colocation facility, the services and costs are shared between customers to helping make it more affordable for everyone. There’s no space to buy or lease with lower costs in terms of power efficiency, less energy consumption, redundant power consumption, and less downtime.

2. 24x7x365 Support

In a colocation center, your systems are maintained by IT experts and engineers who will serve as an extension of your company. In the instance an urgent problem requires attention, onsite technical staff should be available and ready to troubleshoot and resolve any issues. When considering a colocation provider, you should do your due diligence to ensure they offer this service.


3. Flexible Options

Colocation centers offer flexible and extensive network and carrier options. Colocation providers are not tied to one carrier, which offer a competitive marketplace with their data centers' meet-me-rooms (MMRs). Most colocation providers offer their customers different networks and carriers to connect with.

4. Scalability

Colocation allows you to expand your infrastructure to match the needs of your company’s growth. If your company grows, your IT infrastructure can also grow to support it right away with barely any delays. Colocation centers also offer direct connections to cloud providers, which makes it easy to scale with more users and applications.

5. State-of-the-Art Security

Colocation centers are usually located at a strategic location that are less vulnerable to natural disasters (hurricanes, flooding, etc.) and far away from customers’ safety. In addition, there are multiple barriers for entry, and on-site IT support that monitors the security of your space and reports any issues.


Whether a business builds its own data center or decides to rent space for their equipment in a colocation facility, there is no question that data centers are crucial for businesses in all industries. While larger companies may have the resources to build their own data centers, colocation facilities are a better choice for most businesses where they get the same type of benefits while saving costs and retaining much of the flexibility that helps them stay competitive with other companies.

Whether they like it or not, businesses need to consider digitizing their data and leverage the advantages that a local colocation facility provides. Servpac, Hawaii's largest local telecom, now offers colocation service where businesses can move their network and data to the latest data center in Hawaii. Our state-of-the-art facility is a Tier 3 data center located in Mililani Tech Park and 10 miles from the ocean. At 850 feet above sea level, this 30,000 square feet building is less prone to natural disasters such as hurricanes, earthquakes, and tsunamis. The facility is built with 24x7 security and redundancy at all components and levels, providing 100% uptime and guaranteed exceptional performance for tenants. Call 808-237-5000 or contact us to discuss your telecom needs and learn more about our new facility.

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Servpac is a Hawaii-based telecommunications company providing innovative and integrated telephone, internet, and cloud, data center colocation solutions for Hawaii businesses since 2004. The company is the largest locally based CLEC (competitive local exchange carrier) in the state and provides 24/7 local support for island businesses to help them compete in the global marketplace. 

Topics: Business, innovation, technology, cloud

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