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Key data center strategy considerations for HK companies

Kris Kumar | June 17, 2014
As the amount of data being produced, stored and transferred grows exponentially, the demands being placed on technology infrastructure continue to increase. This is certainly true in Hong Kong as a regional hub for the logistics and FIRE sectors (i.e. finance, insurance, real estate and business services), all of which heavily rely on secured data center facilities to support their operations.

Tier IV

99.995% Uptime

45 minutes downtime/year

Tier III

99.982% Uptime

1.6 hours downtime/year

Tier II

99.741% Uptime

23 hours downtime/year

Tier I

99.671% Uptime

29 hours downtime/year


The Tier III standard requires redundant capacity components, multiple independent power distribution paths serving IT equipment, robust cooling systems, and all IT equipment to be dual-powered. Yet the scarcity of Hong Kong office space, combined with high leasing costs can make it next to impossible for most Hong Kong businesses to meet The Uptime Institute's Tier III data center certification standard on their own.

To further complicate things, businesses also need to understand — especially when evaluating potential outsourcing partners — that while Tier III is widely recognized as the de-facto standard for the industry, it's also possible for some Tier III data center operators to provide an uptime that exceeds that of a Tier IV data center.

Calculating TCO

At the end of the day, the combined hard and soft costs of an in-house data center can be astronomical. The implicit assumption by many companies that they cannot afford to use a dedicated data center, needs to be challenged. By comparing total occupancy costs over the expected term of the data center requirement, businesses can properly calculate the TCO of a data center before deciding to invest further in this model or make the decision to outsource through a secure, cost-effective and reliable partner.

To calculate the TCO of a data center, leverage solid occupancy cost data to benchmark available options. Capturing the full impact of capital and operating expense items over the likely term of the occupation will empower businesses to better ascertain a more complete cost comparison.

The route to the right strategy

Ultimately, we need to demystify the common assumptions made by many businesses today when it comes to data center facilities and management. Given the criticality of data and that the volume will only increase as time goes on, a company's data center strategy can have a significant impact on a company's bottom line and long-term success. Understanding the real costs involved and what criteria to evaluate can make all the difference.

The cost of in-house data centers

  1. Sub-optimal infrastructure to support IT equipment in commercial office buildings
  2. High commercial office rents in premium buildings skew the TCO calculation of both employee office spaces and data center space
  3. Commercial office buildings don't meet ever increasing power and cooling requirements of new IT equipment and initiatives such as virtualisation consolidation
  4. Security and reliability levels are ignored, suboptimal or expensive
  5. No SLAs with the landlord for important aspects of IT infrastructure reliability such as cooling, mains power or emergency power
  6. Expensive data center fit out costs with each office relocation


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