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In Cloud Computing and Hosting Last updated: January 27, 2023
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Data centers are an important aspect of our digital economy. They store and manage data and drive your applications and systems, ensuring a consistent user experience.

At present, billions of data are being generated every year. And there’s a need to manage this overwhelming amount of data for businesses to stay competitive, offer the best service to customers, and bring out innovation.

Using an efficient data center can help businesses supply this constant need for data and resources so they can run their IT operations efficiently and prepare for future demands.

Since every business has different needs, different types of data centers are available to cater to those needs.

In this article, I’ll talk about what a data center is and its types so you can choose the best type according to your requirements and budget.

What Is A Data Center?

A data center is a dedicated space in a building that houses computer systems and related components like storage and telecommunication systems. It comprises backup components and robust infrastructure for information exchange, power supply, security devices, and environmental control systems like fire suppression and air conditioning systems.

Governments and private companies utilize data centers to store data and share it with connected systems, endpoints, and customers. They depend mainly on data centers to run IT operations at optimal speed, stability, and security.

Data centers were developed around the 1940s like ENIAC – one of the earliest complex computers to maintain and operate. They were expensive and leveraged often for military purposes. During the 1980s, when IT operations started growing, organizations required technology to control their IT resources, networking, and flow of data. They started maintaining special “computer rooms” that were termed as data centers.

Its usage accelerated in the 2000s when organizations needed a superfast internet connection and IT operation. They started building large facilities to enable enhanced capabilities. And now, the digital transformation has presented us with virtual or cloud data centers to support IT tasks with speed, cost efficiency, and reliance.

How Does It Work?

A data center consists of virtual or physical servers (or robust computer systems) connected externally and internally through communication and networking equipment to store digital information and transfer it. It contains several components to serve different purposes:

  • Networking: It refers to the interconnections between a data center’s components and the outside world. It includes routers, app delivery controllers, firewalls, switches, etc.
  • Storage: An organization’s data is stored in data centers. The components for storage are tape drives, hard disk drives, solid-state drives (SSDs) with backups, etc.
  • Compute: It refers to the processing power and memory required to run applications. It is supplied through powerful computers to run applications.

IT needs these components to store, process, and manage an organization’s critical information and help in the operations. As organizations rely on data centers heavily, maintaining the security, efficiency, and reliability of data centers is one of the top priorities for an organization.

Furthermore, data center facilities must be maintained in an optimal condition with the help of software and hardware systems such as power subsystems, cooling systems, cabling, backup generators, UPS, etc.

In addition, organizations deploy data center services to ensure the components work at optimal performance with integrity. For this, they use network security systems such as firewalls, antivirus systems, etc., and leverage mechanisms like load balancing and automatic failover to ensure performance.

Types of Data Centers

You can come across different types of data centers based on how they are owned, technologies used, and energy efficiency. Some of the main types of data centers that organizations use are:

Managed Data Centers

In a managed data center, a third-party service provider offers computing, data storage, and other related services to organizations directly to help them run and manage their IT operations. The service provider deploys, monitors, and manages this data center model, offering the features via a managed platform.

You can source the managed data center services from a colocation facility, cloud data centers, or a fixed hosting site. A managed data center can either be partially or fully managed.

  • If it’s partially managed, the organization will have administration control over the data center service and implementation.
  • However, if it’s fully managed, all the back-end data and technical details are administered and controlled by the service provider.

Suitable for: The ideal users of managed data centers are medium to large businesses.

Benefits: You don’t have to deal with regular maintenance, security, and other aspects. The data center provider is responsible for maintaining network services and components, upgrading system-level programs and operating systems, and restoring service if anything goes wrong.

Enterprise Data Centers

An enterprise data center refers to a private facility that supports the IT operations of a single organization. It can be situated at a site off-premises or on-premises based on their convenience. This type of data center may consist of multiple data centers located at different global locations to support an organization’s key functions.

For example, if a business has customers from different global regions, they can set up data centers closer to their customers to enable faster service.

Enterprise data centers can have sub-data centers, such as:

  • Intranet controls data and applications within the main enterprise data center. Enterprise uses the data for their research & development, marketing, manufacturing, and other functions.
  • Extranet performs business-to-business transactions inside the data center network. The company accesses the services through VPNs or private WANs.
  • The internet data center is used to support servers and devices needed to run web applications.

Suitable for: As the name suggests, enterprise data centers are ideal for enterprises with global expansion and distinguished network requirements. It’s because they have enough revenue to support their data centers at multiple locations.

Benefits: It’s beneficial for businesses as it allows them to track critical parameters like power and bandwidth utilization and helps update their applications and systems. It also helps the companies understand their needs more and scale their capacities accordingly.

However, building enterprise data center facilities needs heavy investments, maintenance needs, time, and effort.

Colocation Data Centers

A colocation data center or “colo” is a facility that a business can rent from a data center owner to enable IT operations to support applications, servers, and devices. It is becoming increasingly popular these days, especially for organizations that don’t have enough resources to build and manage a data center of their own but still need it anyway.

In a colo, you may use features and infrastructure such as building, security, bandwidth, equipment, and cooling systems. It helps connect network devices to different network and telecommunication service providers.

The popularity of colocation facilities grew around the 2000s when organizations wanted to outsource some operations but with certain controls. Even if you rent some space from a data center provider, your employees can still work within that space and even connect with other company servers.

Suitable for: Colocation data centers are suitable for medium to large businesses.

Benefits: There are several benefits that you can avail yourself from a colocation server, such as:

  • Scalability to support your business growth; you can add or remove servers and devices easily without hassles.
  • You will have the option to host the data center at different global locations closest to your customers to offer the best experience.
  • Colocation data centers offer high reliability with powerful servers, computing power, and redundancy.
  • It also saves you money as you don’t have to build a large data center from scratch at multiple locations. You can just rent it out based on your budget and present needs.
  • You don’t need to handle the data center maintenance such as device installation, updates, power management, and other processes.

Cloud Data Centers

One of the most popular types of data center these days is the cloud data center. In this type, a cloud service provider runs and manages the data center to support business applications and systems. It’s like a virtual data center with even more benefits than colocation data centers.

The popular cloud service providers are Amazon AWS, Google, Microsoft Azure, Salesforce, etc. When data uploads in the cloud servers, the cloud service providers duplicate and fragment this data across multiple locations to ensure it’s never lost. They also back up your data, so you don’t lose it even if something goes wrong.

Now, cloud data centers can be of two types – public and private.

  • Public cloud providers like AWS and Azure offer resources through the internet to the public.
  • Private cloud service providers offer customized cloud services. They give you singular access to private clouds (their cloud environment). Example: Salesforce CRM.

Suitable for: Cloud data centers are ideal for almost any organization of any type or scale.

Benefits: There are many benefits of using cloud data centers compared to physical or or-premise data centers, including:

  • It’s cost-effective as you don’t have to invest heavily in building a data center from scratch. You just have to pay for the service you utilize and as long as you need it.
  • You are free from maintenance requirements. They will take care of everything, from installing systems, upgrading software, and maintaining security to backups and cooling.
  • It offers a flexible pricing plan. You can go for a monthly subscription and be aware of your expenditure in an easier way.

Edge Data Centers

The most recent of all, edge data centers are still in the development stage. They are smaller data center facilities situated closer to the customers an organization serves. It utilizes the concept of edge computing by bringing the computation closer to systems that generate data to enable faster operations.

Edge data centers are characterized by connectivity and size, allowing companies to deliver services and content to their local users at a greater speed and with minimal latency. They are connected to a central, large data center or other data centers. In the future, edge data centers can support autonomous vehicles and IoT to offer higher processing power and improve the consumer experience.

Suitable for: Small to medium-sized businesses

Benefits: The benefits of using an edge data center are:

  • An edge data center can distribute high traffic loads efficiently
  • It can cache requested content and minimize the response time for a user request.
  • It can also help increase network reliability by distributing traffic loads efficiently.
  • The data center offers a superb performance by placing computation closer to the source.

Hyperscale Data Centers

Hyperscale data centers are massive and house thousands of servers. They are designed to be highly scalable by adding more devices and equipment or increasing system power.

The demand for hyper scale data centers is increasing with increasing data generation. Businesses now deal with an enormous amount of data, which begins to rise. Hence, to store and manage this sort of data, they need a giant data center, and hyper scale seems to be the right choice for it.

Suitable for: Hyperscale data centers are best for large enterprises with massive amounts of data to store and manage.

Benefits: Initially, the data center providers designed hyper scale data centers for large public cloud service providers. Although they can build it themselves, renting a hyper scale data center comes with a lot of benefits:

  • It offers more flexibility; companies can scale up or down based on their current needs without any difficulties.
  • Increased speed to market so they can delight their customers with the best services.
  • Freedom from maintenance needs, so they don’t waste time in repetitive work and dedicate that time to innovation.

Other than these five main types of data centers, you may come across others as well. Let’s have a quick look at them.

Carrier hotels are the main internet exchange points for the entire data traffic belonging to a specific area. Carrier hotels focus on more fiber and telecom providers compared to a common colo. They are usually located downtown with a mature fiber infrastructure.

However, creating a dense fiber system like this takes a great deal of effort and time, which is why they are rare. For example, One Wilshire in Los Angeles has 200+ carriers in the building to supply connectivity to the entire traffic coming from the US West Coast.

Microdata center: It’s a condensed version of the edge data center. It can be smaller, like an office room, to handle the data processing in a specific location.

Traditional data centers: They consisted of multiple servers in racks, performing different tasks. If you need more redundancy to manage your critical apps, you can add more servers to this rack. Starting around the 1990s, in this infrastructure, the service provider acquires, deploys, and maintains a server.

Over time, they add more servers to facilitate more capabilities. It needs monitoring the operating systems using monitoring tools, which requires a certain level of expertise. In addition, it requires patching and updating, and verifying them for security. All these require heavy investments, not to mention the powering and cooling cost is added extra.

Modular data centers: It’s a portable data center, meaning you can deploy it at a place where you need data capacity. It contains modules and components offering scalability in addition to power and cooling capabilities. You can add modules, combine them with other modules or integrate them into a data center.

Modular data centers can be of two types:

  • Containerized or portable data centers arrange equipment into a shipping container that gets transported to a particular location. It has its own cooling systems.
  • Another type of modular data center arranges equipment or devices into a capacity with prefabricated components. These components are quick to build on a location and added for more capacity.

What Are the Data Center Tiers?

Another way of classifying data centers based on uptime and reliability is by data center tiers. The Uptime Institute developed it during the 1990s, and there are 4 data center tiers. Let’s understand them.

Tier 1: A tier 1 data center has “basic capacity” and includes a UPS. It has fewer components for redundancy and backup and a single path for cooling and power. It also involves higher downtime and may lack energy efficiency systems. It offers a minimum of 99.671% uptime, which means 28.8 hours of downtimes yearly.

Tier 2: A tier 2 data center has “redundant capacity” and offers more components for redundancy and backup than tier 1. It also has a singular path for cooling and power. They are generally private data centers, and they also lack energy efficiency. Tier 2 data centers can offer a minimum of 99.741% uptime, which means 22 hours downtimes yearly.

Tier 3: A tier 3 data center is “concurrently maintainable,” ensuring any component is safe to remove without impacting the process. It has different paths for cooling and power to help maintain and update the systems.

Tier 3 data centers have redundant systems to limit operational errors and equipment failure. They utilize UPS systems that supply power continuously to servers and backup generators. Therefore, they offer a minimum of 99.982% uptime, which means 1.6 hours of downtimes yearly and N+1 redundancy, higher than tiers 1 and 2.

Tier 4: A tier 4 data center is “fault-tolerant” and allows a production capacity to be protected from any failure type. It requires twice the number of components, equipment, and resources to maintain a continuous flow of service even during disruptions.

Critical business operations from organizations that cannot afford downtimes use tier 4 data centers to offer the highest level of redundancy, uptime, and reliability. A tier 4 data center provides a minimum of 99.995% uptime, which means 0.4 hours of annual downtime and 2N redundancy, which is superb.

Why Do You Need Data Centers?

The demand for information, high processing capacity, and more storage is growing. Although moving to the cloud is an excellent way to do that, it doesn’t mean data centers are not needed now. You need a system to process and store the data, and it can happen even in the cloud, and that’s why we have cloud data centers now.

Whether cloud or on-premises, there is a need for data centers for every business these days, including education institutions, healthcare systems, telecom companies, government organizations, financial institutes, retailers, and so on, to avail of these benefits:

Efficient Data Management and Storage

The need to store data increases as a business grows. A data center can serve this purpose and also cater to efficient management. In addition, data centers offer innovative ways to store and manage data to enable cloud computing implementation.

Furthermore, data centers have robust backup systems in place. Your data can be duplicated and distributed across different locations. It can also create a backup of your backups to ensure you never lose the data.

Data Security

Data security is crucial for every business with the increasing amount of cybercrimes. Hence, organizations need capabilities to monitor their systems, applications, and data and update them regularly to reduce the attack surface.

With an efficient and security-enabled data center, organizations can monitor their systems and identify attacks, if any, at the earliest, so they can take remedies immediately. The data center provider ensures security by employing firewalls, surveillance, intruder management, access management, failover systems, and physical security.

Cost Efficiency

Power outages or other disturbances can cost billions of dollars. By enabling a data center with systems to withstand such conditions, you can save costs. It’s more efficient than surge protectors and generators that need higher energy to maintain and start and are affected by power spikes and electrical disturbances that add up the cost.

By taking up services from a data center provider, you can further cut down costs. This way, you don’t have to build a data center from scratch or maintain and update the components. They also come with flexible pricing models, so you can choose a plan based on your requirements and budget for the services you utilize.

Conclusion 👨‍🏫

I hope the above information on data centers and their types helps you understand the concepts so you can decide what’s best suitable for your business.

  • Amrita Pathak
    Amrita is a freelance copywriter and content writer. She helps brands enhance their online presence by creating awesome content that connects and converts. She has completed her Bachelor of Technology (B.Tech) in Aeronautical Engineering…. read more
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