Data Center

TCO: The Big Differentiator for Data Center Service Providers

Data center service providers know that what they’re selling – data center capacity in one form or another – is becoming a commodity. If a customer were to tour your facility, it’s not likely to look all that much different from your competitor’s.

When customers look to outsource their data center requirements, most often the decision comes down to economics and location: who can offer the best deal in the region they’re targeting. Whether it’s a single rack or 500kW of capacity, those criteria customers care about rise to the top of the stack.

Your ability to charge a premium for either retail or wholesale colocation services is minimized because customers have more options than ever, with more and more companies entering the space. Sure, you can try to wow customers with talk about service level agreements and customer service and so forth. But are you really offering anything dramatically different from your competition? I doubt it.

In this environment, service providers make money and protect their investments by controlling their total cost of ownership. That means you’ve got to provide quality service while watching every dime of operational and capital expense.

It starts with a simple design. Simple is better. It saves capital, lowers operational expense and reduces risk. The more equipment you have, the greater your up-front capital expense. Similarly, every piece of equipment adds to the complexity of the data center and drives up operational costs for everything from energy to maintenance. Reducing TCO comes down to looking for ways to simplify and improve efficiency while maintaining a level of resiliency that meets your business requirements.

That’s where the new Schneider Electric Data Center Service Provider team comes in. Our purpose is to help service providers develop capacity that delivers on that idea of simplicity and efficiency.

The most powerful way we can demonstrate our value proposition is by presenting a TCO model that protects your short and long term investment by incorporating all the costs associated with designing, building, operating and maintaining your data center.

The kicker is, as I said in my last post, we’ll commit to an all-in TCO number for 5, 7 or 10 years.

Data center operators have to understand risk and how to design a facility to avoid failures. But they also have to consider the risk of the business failing due to costs spiraling out of control. Hitting sound, pre-set TCO numbers is a way to mitigate that risk.

If you want to learn how to come up with a TCO model that you can count on, just get in touch – we’ll be happy to help.


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