Capex to Opex

Many of the world’s leading enterprises now outsource their data center requirements.

Historically, the decision to build or lease a data center largely came down on the side of ‘build.’ Many enterprises had substantial cash to invest and there wasn’t an established outsourced data center market from companies that specialized in building and maintaining data centers. For many businesses, the choice was fairly obvious.

However, within 5 to 10 years and the dynamics of this decision have changed dramatically. To optimize capital investment, companies usually tend to direct their investment toward revenue-generating activities. This is why many companies prefer to lease real estate rather than purchase – they do not want to tie up precious capital in dead assets.

It is the fact that owning a data center requires capital expenditure, while using an external hosting or cloud service that offers pay-as-you-go service falls into ongoing operating expenditures. Renting all facilities instead of procurement, the company can reduce initial investment.

Furthermore, outsourcing data center capabilities also means cutting costs in terms of staff and maintenance. The managed service provider shall provide teams of engineers who maintain the facilities 24/7, monitor the hardware and carry out necessary maintenance tasks.

The economies of scale, expertise and flexibility of an outsourced data center to most businesses make a compelling case.

At GDS, we believe that we can address the challenges may face to you and put your organization in the driver seat to making the right decision.