Servers—midrange computers providing data and services across networks—are a core part of a typical corporate IT infrastructure. Yet they are often housed in converted conference rooms or closets, an arrangement that doesn’t fully protect them and complicates support. Amid growing concerns about security and reliability, many large companies are moving servers into data centers—large, closed facilities that traditionally house mainframes. New data centers are often needed for the thousands of additional machines. To manage the costs, companies are building large (and thus more efficient) facilities in suburbs or low-cost regions in states such as Delaware and Texas. These secure buildings can cost $1,000 per square foot to erect and $30 per square foot a month to run—five to ten times the cost of office space in leading cities. Nonetheless, though technical or regulatory constraints may complicate a move,1 the lower cost of labor, energy, and, above all, real estate means that a remote state-of-the-art facility can still pay for itself in two to three years. Thereafter, the annual net savings can exceed 30 percent as compared with the cost of existing facilities.
About the Authors
Bradford Brown is a principal, James M. Kaplan is an associate principal, and Thomas Weber is a consultant in McKinsey’s Stamford office.
Notes