Data Centres and Cloud - Am I Bovvered?

24 April 2017

Technological advances provide businesses with more options, but with it come many more decisions of which strategy to opt for. One area where we have seen huge change is the way in which organisations manage their data centres. This has primarily been enabled by the Cloud and the economic recession of 2007/2008, driving businesses to seek leaner and cheaper ways to operate their infrastructure.

So what do we mean by data centre delivery options? Our definitions, for the purpose of this article are outlined below but there are of course hybrid models which we have not explored here.

1. In house data centre or computer room

This is the traditional model which is still present in many organisations. It is a room within the organisations premises, and/or off-site premises which houses storage, servers, and connectivity. These are owned by the business rather than a third party.

2. Co-Lo data centre

A Co-Lo is a co-location data centre which is a secure purpose built facility whereby an organisation can house their data centre requirements. There will be other organisation’s equipment within the facility which should in theory provide commercial efficiencies of shared space. Typically your hardware would be contained within a locked rack or caged environment that can only be accessed by approved personnel.

3. Cloud services

An internet based computing facility that shares resources such as servers, storage, applications and services. This can be either a private or public Cloud. To be clear, the customer/organisation does not own or rent infrastructure. The commercial model is driven by what you actually use – for example how much you store and which services you access.

Barriers to Cloud adoption


Believe it or not this emotive concern is one of the primary barriers to change that I have experienced when challenging organisations with physical data centres to move to a Cloud deployment. So why are people scared? Most of the concerns are unjustified and with robust planning should be easily managed. The main things people cite are security issues, data privacy, and the inability to migrate applications and data seamlessly from the physical to the Cloud. Over time these fear barriers have become noticeably eroded as the commercial benefits of Cloud push organisations to work through the concerns methodically to see how real the risk actually is. In most cases, the security of Co-Lo and Cloud services is far greater than hosting your infrastructure in house.

Regulatory concerns

There are a number of industries that are not regulated beyond the extent of complying with the law. In that instance there will be a requirement to comply with the Data Protection Act 1998** which states that personal data shall not be transferred outside of the EEA unless that country has adequate levels of protection in line with the rights and freedoms of data subjects relating to the processing of their personal data. There are a number of countries who fall short of this requirement and therefore for a business to outsource to the Cloud without fear of breaking the law, they would need assurance from the Cloud provider of the locations that the data could/would be located. This is an ever developing area as countries and groups of countries attempt to agree privacy frameworks. A good example being the discussions between the USA and the EU on Safe Harbour which was overturned in 2015 by the European Court of Justice, and more recently EU-US Privacy Shield which came into effect in July 2016. 

** will be superseded by General Data Protection Regulation (GDPR) in May 2018

Infrastructure investments

For a long time a physical data centre was the only option, leading organisations to invest in employees, premises, hardware, software, cooling and so on. This will inevitably involve two premises; a primary and secondary data centre. Closing a data centre cannot be done overnight, and it would inevitably not be cost effective to do it straight away, anyway – particularly if all of the storage arrays have just been replaced!

Arguments for Cloud adoption

Scalability and Agility

One of the main advantages of the Cloud is scalability, and the ease and speed with which that can be done. Within a physical data centre upfront investment would be needed and computing resources would then need to be provisioned which all takes time. Provisioning new apps and instances in the Cloud, or dealing with increased workloads is almost immediate and nobody needs to physically visit a site to do it.

Cost Efficiencies

Many organisations are worried about capital expenditure, and are opting for subscription based models which is accounted for as operational expenditure. Furthermore, businesses are recognising the ongoing costs of maintaining physical kit, and managing it’s decommission when it is no longer supported by the manufacturer. The total cost of ownership becomes very expensive. Whilst each individual use case is different, Cloud is hailed as being more cost efficient than operating physical premises with owned kit.

Leave it to the experts

The reality is that Cloud service providers such as Amazon Web Services (AWS) or Microsoft Azure are likely to deliver greater computing power, securely, efficiently and more cost effectively than most other organisations. This leaves businesses to focus on their own core competencies such as Banking, Retail, or Marketing, and not waste time and effort trying to do something half as well as Amazon or Microsoft could.

In Summary

As with all of these big questions, the answer is very rarely binary, and in the interests of not disappointing you, neither is this article. There remain workloads that some organisations will inevitably want to have on their physical premises or in a Co-Lo, due to high sensitivity of the content, of legislative or regulatory issues. This is not a static position and, as we have already seen in recent years, the barriers to Cloud adoption have been dramatically eroded. I would certainly hazard a guess that over the next decade the prevalence of physical data centres steadily declines as Cloud takes over.

The decision for organisations is not a simple one, and the BDO Technology Advisory Services team has masses of experience assessing Cloud readiness and working through feasibility assessments and business cases. If you would like further information on how we could help your business please call Gavin Davis on 0118 925 4400 or email [email protected]