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Decoding the Data Center Advantage: Unveiling Myths and Embracing Transformation

In a pivotal decision, everyday technology companies embarked on a transformative journey, opting to make data centers the bedrock of their infrastructure strategy. The enduring power of this choice is underscored by numerous compelling reasons. Amidst the landscape, myths perpetuated by "cloud providers" abound. Leveraging our hands-on experiences in operating a data center, we aim to unravel these myths and offer our informed perspective.

Team Payroll Concerns:

Myth: Hardware savings will be absorbed by a larger team payroll.

Reality: Usually we see no change in team composition post-cloud exit. Typically we see the same team efficiently operate apps on their hardware, dispelling the cloud marketing myth of reduced operations headcount.

Optimizing Cloud Bill:

Myth: Optimizing the cloud bill could have sufficed.

Reality: We usually meet companies whose cloud bills were twice as large, and optimizing it demands substantial recurring efforts. Cloud exits can offer substantial potential savings, especially for mid-sized and larger software companies.

Cloud Native Application Fallacy:

Myth: Building a Cloud Native application is the key to cost savings.

Reality: Cloud Native, often marketed as a cost-saving solution, can be misleading. Man times we see companies debunk the notion that serverless functions and on-demand tooling necessarily make things more economical.

Security Concerns:

Myth: Operating outside the cloud invites security risks.

Reality: Security problems are not inherently different whether you own or rent computers. Cloud services may provide a false sense of security, and modern containerized application delivery minimizes manual patching efforts.

Need for Super Engineers:

Myth: Operating own hardware requires a world-class team.

Reality: Decades of experience in operating hardware dispel the notion of needing magical insights. The expertise needed is largely similar, and scaling to your level is achievable with competent teams.

Data Center Ownership Misconception:

Myth: Owning hardware means dealing with data center complexities.

Reality: Renting space at professional data center operators, like Equinix, eliminates concerns about security, power delivery, and infrastructure costs.

Global Performance Equivalence:

Myth: Cloud offers faster international performance.

Reality: Similar to cloud setups, companies leverage two U.S. data centers and an international CDN for content delivery, maintaining a fundamentally equivalent equation for global internet application performance.

Hardware Provisioning and Scalability:

Myth: Cloud's instant provisioning is unmatched.

Reality: Hardware advancements make over-provisioning cost-effective. Secondly, cloud premiums for instant bootstrapping aren't justified for businesses, where a short wait for server deployment is tolerable.

Consideration for Server Replacement Costs:

Myth: Calculating server lifespan costs is overlooked.

Reality: When companies run math servers lasting five years pay off quickly with savings secured by the cloud.


Privacy Regulations and GDPR:

Myth: Clouds offer advantages in privacy regulations.

Reality: Cloud providers' American ties pose privacy concerns. Owning hardware and utilizing European data center providers align better with GDPR compliance for European companies.

Bursts in Demand and Autoscaling:

Myth: Cloud excels in handling demand spikes.

Reality: Hardware cost-effectiveness allows for over-provisioning, and accommodating demand spikes without significant budget impact. The saying "buy the baseline, rent the spike" holds true for many companies.

Service Contracts and Licensing Fees:

Myth: Open-source alternatives don't match service contracts.

Reality: Running open-source versions on hardware negates the need for expensive service contracts. The underlying equation remains unchanged, with the potential for substantial savings.

Revisiting the Cloud Decision:

Myth: The Cloud's promises of being cheaper, easier, and faster always hold.

Reality: Cloud's speed in provisioning servers is commendable but not worth the premium for infrequent usage. Years of attempting savings from "economies of scale" and "ease of use" proved elusive.

In conclusion, the company's commitment to adopting data centers highlights a plethora of advantages associated with this strategic move. Ranging from cost-effectiveness to global scalability and enhanced security, the cloud stands as a formidable ally for businesses aiming to maintain agility, foster innovation, and ensure operational efficiency. As the company progresses in its evolution, the resilience of data center hosting can steadfastly serve as a cornerstone of its enduring infrastructure strategy.


Derek Distenfield, a seasoned professional with over 15 years of leadership experience in the US Army, nonprofit organizations, and diverse corporate environments, currently holds key roles as the Managing Director at FG Ventures and the President of Digital Ignition.

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