How to Build a Data Center?

Updated on Aug 26, 2022 by

As more businesses and organizations become dependent on the internet, there’s an increasing need to manage data and information to and from the end-users. Data centers are the physical facilities that house servers and other computing hardware such as routers, switches, cables, firewalls, etc. They are also home to cloud computing and are responsible for hosting websites, managing emails, and instant messaging services. Data centers also offer networking, data backup, and recovery services.

Often, small businesses that want to minimize the cost of running and managing in-house servers migrate their applications to data center service providers. The latter are technology companies or vendors that have invested a lot of money and resources to build a shared yet secure and reliable physical computing infrastructure.

Similarly, large organizations with enough resources may choose to build their own data centers. This is especially true for companies operating in highly regulated industries like finance, insurance, and healthcare. Such organizations decide to manage their data and run their operations without worries of data security & privacy issues, IP theft, outages, etc. If you want to build a data center, there are a couple of factors to consider. We’ve rounded up the most important below.

6 steps to make before building a data center

Key Considerations When Building a Data Center

Before we look at the steps to take when building a data center, it’s important to understand the different types of data centers. That way, you’ll weigh your options for better decision-making. The four types of data centers are:

  • Enterprise data centers

  • Colocation data centers

  • Managed service data centers

  • Cloud data centers

Now that you know the different types of data centers, let's explore the technical, strategic, and cost considerations you should make when building a data center.

Technical Considerations

Step 1: Consider Your Physical Footprint/Location

The location and size of your data center are two important aspects that will largely impact the cost and other design requirements. Based on the size of the company and the current growth rate, you can make an estimated guess on the number of server racks, switches, and other equipment you may need. As far as location is concerned, pick a place with favorable regulations and minimal geopolitical risks. Other factors such as the availability of resources and security are also critical.

Step 2: Review Your Network Requirements

Once you have estimated your physical footprint and identified the most likely location(s), you want to keenly evaluate your network requirements. Factors such as connectivity and efficient communication are necessary to ensure the optimal functioning of the data center. The network carriers or providers you choose should also be reliable enough to avoid downtimes and other performance issues.

Strategic Considerations

Step 3: Identify Common Risks

Every modern or digital company relies on data centers to execute specific business processes and operations. Any issue hindering data center performance can have a huge and costly impact on the end-users. Common problems such as power outages can easily be avoided by installing reliable backup power sources. However, unpredictable risks such as natural disasters or cyberattacks may require sophisticated mitigation measures. But before mitigating these risks, you’ll need first to identify, evaluate and rank them in order of priority.

Step 4: Optimize the Design

Once you are ready to design your data center, pay attention to user experience, security, scalability, and convenience. The last thing you would want is a poorly designed data center with unreliable infrastructure. Always test and improve your data center design before and after deployment. You should also automate as many functions as possible to boost efficiency and enhance easy integration. The goal is to future-proof the design, making it fault-tolerant and highly scalable.

Step 5: Prioritize Analytics and Reporting

To keep the data center running optimally, you need to implement a robust analytics and reporting mechanism. This helps ensure that all the critical aspects such as power, networking, security, and efficient cooling are always available. You can also combine analytics and threat detection to keep your data center safe from common cyberattacks such as DDoS, malware, phishing, and ransomware.

Cost Considerations

Step 6: Review the Overall Cost

Once you have considered all the factors discussed above, you can proceed to evaluate the overall cost of setting up your data center. As noted earlier, there are different types of data centers, and the right one for you will depend on your unique needs.

If you're going to build an enterprise data center, you need to consider current and future business needs. Of course, colocation and managed services data centers are often designed to be more flexible to meet the needs of your business and end-users at different times.

Businesses that opt for colocation data centers should consider hidden costs such as cross-connect fees, extra network and remote-hands costs. Such cost components could significantly bump up the price. The service levels offered in the data center will also affect the pricing. On the contrary, if you are a data center service provider and wish to build a colocation data center, you must also consider certain operation and management costs.


Building a data center is all about proper planning and research. Several details go into the design and implementation phases. So you don’t want to go all-in on your own. Instead, enlist the help of various professionals, from IT experts, cybersecurity teams, designers, and engineers. Another option, and perhaps the best, is to work with a reputed data center design company.

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