Navigating the Decision of Opting the Build vs Buy in Data Center

Explore the crucial decision between building or buying a data center. Gain insights into factors, costs, and benefits for an informed choice.

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Recent reports suggest that India is on its way to become a USD 1 trillion digital economy by 2030, fuelled by government digital initiatives, increasingly digital-savvy consumers, and the rising adoption of new age technologies by enterprises such as cloud, IoT, 5G, Big Data and AR/VR.


Third-party data centers (DCs) are the pillars of this digital growth and are becoming a preferred choice for organisations as Captive DCs are not sufficient to host digital content of this scale. The Covid-19 pandemic also accelerated the adoption of third-party DCs as maintaining captive DCs became very challenging for organisations because of the limited mobility and access issues.  According to a Crisil India report, the Indian data center capacity will be more than double to 1,700-1,800 MW by 2025. Indian data center as well as global players are making massive investments in building new large data centers across key metro cities to enable India’s digital-first ecosystem in a sustainable way.

Here’s a sneak peek into some advantages enterprises and hyperscalers gain moving with a third-party data center partner:

Reliability:  Digital era demands 100% infrastructure uptime. Third-party data center facilities are TIA 942/Uptime certified, offer dual power feeds, N+N distribution layer and redundant infrastructure, thus minimizing the risk of unplanned disruptions and downtime. This enables the new age digital infra to power end user services 24*7.


Scalability: A third-party data center partner can design and operate new age, purpose-built facilities that offer the flexibility to easily scale up as the business grows. Wherein, Captive DCs, due to structural restrictions, have limited scope to scale to host the ever-growing digital content.

Network: Hosting IT infrastructure with an experienced data center partner can help you get the advantages of a top-notch interconnection ecosystem including carrier neutral infrastructure, Peering's, internet Exchanges, CDN, and Cloud connect (Single port Multi access cloud). In a Captive DC environment, lesser telco options, limited bandwidth, peering & cloud connect issues and last mile connect problems can lead to performance snags, sometimes ultimately disrupting the user experience.

Security: Third-party data centers are purpose-built and have the best amalgamation of physical and electronics security, along with adherence to global standards & regulations. Organisations get access to multi-layer high-level security features including under vehicle scanner, surveillance cameras, biometric access mechanisms, intrusion detection systems, man traps, and centralized command center that ensures a safer and protected place to safeguard your sensitive data.


Sustainability: Data centers are energy guzzlers and maintaining a low Power Usage Effectiveness (PUE) is critical in ensuring energy optimisation and meeting the long-term sustainability goals. Third-party data centers conceived with green design & operations, powered by renewable energy can drive resiliency and lower PUE. Thus, offering benefits of economies of scale and lower Total Cost of Ownership (TCO) to hyperscalers and enterprises.

Compliance & management: Maintaining multiple compliances with various regulatory/statutory bodies and managing DC operations to avoid maintenance and monitoring hassles, involves a lot of complexities and investment. With Colocation managed services, enterprises can focus more on their core business and leave important tasks – both ad hoc and routine – to the expertise of always-available high skilled technology professionals to ensure uninterrupted operations.

Cost – Setting up a new data center is CAPEX intensive. With the third-party data center model, organisations can save on the CAPEX up front and get the flexibility to opt for DC services based on the OPEX model (pay only for consumption). Also, organisations get the cost benefits of industrial power rates and green power, which are much lower than the commercial rates.

Digital content will continue to rise exponentially and the last thing an enterprise would want is to get stuck with a legacy infrastructure that can impede their business agility and scalability. Third party data center providers are well equipped to meet the changing business needs of the digital era by helping them build their future-ready IT infrastructure.

  • By Rajesh Tapadia, Chief Operating Officer, Nxtra by Airtel.
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