Internal or External IT Infrastructure Hosting: Understanding How to Make the Right Choice

The question of whether to host a company's IT infrastructure internally or externally is complex, as it has multiple implications: technical, organizational, social, and financial. Before making a decision, which will have significant consequences, an assessment is essential.

Initially, it involves evaluating the existing situation: is the current data center obsolete or optimizable (premises, electrical power, cooling, etc.)? Are the technical infrastructures it hosts up to standard? Is its surface area sufficient for future developments? Etc. In addition to the data center's condition, organizational and HR criteria must also be considered: which teams manage the data center and with what skills? Do general services and/or the real estate department (building management) and the IT department (IT infrastructure and application management) work together for comprehensive, coherent, and relevant data center management? Finally, an assessment of the company's history and future needs is also necessary: have serious operational incidents, which will no longer be tolerated in the future, already occurred? What are the expected availability and performance levels? How, and by how much, can the data center's energy bill be reduced? Is inter-site resource pooling possible? What capacity is needed in the short, medium, and long term?

Seemingly obvious, this first step is of paramount importance because it will allow all possible options – construction of a new data center, upgrading existing facilities, external hosting – to be considered based on the company's constraints, challenges, and needs. Once this assessment has been carried out, it is essential, before making a decision, to understand the implications of each option considered.

Having an in-house data center means choosing to design, evolve, and operate your own IT rooms. In the short term, from a strictly financial and organizational perspective, it is undoubtedly the most expensive choice. Indeed, in addition to building-related costs, multidisciplinary teams are essential to ensure the proper functioning of the data center: IT operations teams, of course, but also teams capable of supervising the proper functioning of technical infrastructures with specialists in high and low voltage, building cooling, etc. Versatile teams that are not always easy to assemble.

However, this option allows the company to control its IT infrastructures and evolve them according to its needs and strategic choices, without depending on a provider who may move into other businesses, be acquired, or simply be unable to meet a particular demand for technical, organizational, and/or commercial reasons. And in the long term, this option is not necessarily the most expensive...

In a difficult economic context, the choice of external hosting has many advantages from a financial point of view: no heavy investment, no teams dedicated to building management and reduced for IT infrastructures, a temporary complementary solution, a controlled and predictable annual cost, etc.

However, before outsourcing its hosting, the company must evaluate the organizational and social consequences of such a decision. Furthermore, it is crucial to choose a hosting provider capable of meeting the company's current and future needs. Therefore, a number of points should be anticipated when contracting with any provider. The contract should, for example, provide for reversibility as well as the possibility for the company to conduct regular audits of the hosting provider's facilities and working methods, or to renegotiate capacity (allocated space, electricity, etc.) and/or performance and service levels during the contract.

In all cases, in the medium to long term, the total cost of external hosting approaches, or may even exceed, that of an internal data center. To make the right decisions, all costs and implications of each option should be compared over a period of 5, 10, and 15 years.