What is a Data Center?

The future of data centers will rely on the cloud, hyper-converged infrastructure, and more powerful devices.

What is a Data Center?

At its simplest, a data center is a physical facility that organizations use to house their critical applications and data. Its design is based on a computing and storage resources network that enables the delivery of shared applications and data. The critical components include routers, switches, firewalls, storage systems, servers, and application-delivery controllers.

data center

How does it work?

A data center facility, which enables an organization to collect its resources and infrastructure for data processing, storage, and communications, includes the following:

  • systems for storing, sharing, accessing, and processing data across the organization;
  • physical infrastructure for supporting data processing and data communications;
  • utilities such as cooling, electricity, network security access, and uninterruptible power supplies (UPSes).

Gathering all these resources in a data center enables the organization to do the following:

  • protect proprietary systems and data;
  • centralize IT and data processing employees, contractors, and vendors;
  • apply information security controls to proprietary systems and data;
  • realize economies of scale by consolidating sensitive systems in one place.

Why do you need it?

The core business and daily operations of almost all modern enterprises now require IT systems and computing power to support them, as well as store, manage and analyze the large amount of data they are gathering each day. Housing these systems in a centralized facility simplifies management and infrastructure efficiency, making it easier to implement better reliability and security features.

Depending on their situation and requirements, an organization may choose to build and operate their own data center, house their server equipment in a data center owned and operated by a third party (“co-location”), or outsource all of their IT operations equipment and infrastructure to a third party provider (“cloud computing“).

What are the core components?

Data center design includes routers, switches, firewalls, storage systems, servers, and application delivery controllers. Because these components store and manage business-critical data and applications, data center security is critical in data center design. Together, they provide:

  • Network infrastructure. This connects servers (physical and virtualized), services, storage, and external connectivity to end-user locations.
  • Storage infrastructure. Data is the fuel of the modern data center. Storage systems are used to hold this valuable commodity.
  • Computing resources. Applications are the engines. These servers provide the processing, memory, local storage, and network connectivity that drive applications.

data center

Tiered data center

Data centers can have different levels of security, latency, and resiliency—these levels are known as tiers. Tiered data centers allow for hierarchical data storage, where the files and data for applications that users access most frequently, or that require very high performance, can live in one tier, while data that is not accessed as frequently can live in a different tier. In public cloud-based storage-as-a-service models, tiers with low latency are generally more expensive than tiers with higher latency.

The tier with the lowest latency and the fastest access typically lives closest to the users, where users can easily interact with it daily. The fastest tier is known as Tier Zero. Businesses such as financial services or medical research that use high-performance computing for big data analytics are frequent users of Tier Zero storage. Lower performing storage tiers can act as back-up for the primary tier, or as storage for data that is less frequently accessed. Archived data can live in the lowest and least expensive storage tier, where high latency is less of an issue.

Types of Data Centers

There are various types that businesses can build or store their data within. These include:

Colocation Facilities

Colocation facilities rent out space that is owned by the provider. The data center infrastructure is hosted by the building owner, which includes equipment and services for bandwidth, cooling systems, networking, power, and security. The companies or service providers renting the space are responsible for installing and managing components such as firewalls, data center servers, and storage.


One of the largest types is an enterprise data center, a facility that has been built by and is owned and operated by a business for its use. The facility can be located on the organization’s site but is typically situated off-premises at a location that offers prime connectivity, power, and security. Building and equipping an enterprise data center requires significant capital investment but enables organizations to design it to fit their specific requirements.


A hyperscale is designed to provide the hyperscale computing that is necessary for cloud and big data storage. A hyperscale facility enables major cloud players to provide robust, scalable applications and storage services to their customers. These facilities are typically at least 10,000 square feet in size and have more than 500 cabinets and 5,000 servers running on an ultra-high-speed network. The key difference between hyperscale and enterprise data centers is the high fiber network that is utilized across a hyperscale facility.

data center

Future of the data center

The data center is far from obsolete. CBRE, one of the largest commercial real estate investment and services firms, says the North American data center market grew new capacity by 17% in 2021, much of this due to hyperscalers like AWS and Azure, as well as social media giant Meta.

Enterprises are generating more data every day, whether that’s business process data, customer data, IoT data, OT data, data from patient monitoring devices, etc. And they are looking to perform analytics on that data, either at the edge, on-prem, in the cloud, or a hybrid model. Companies might not be physically building brand new, centralized data centers, but they are modernizing their existing data center facilities and expanding their data center footprint to edge locations.

Looking ahead, demand from autonomous vehicle technology, blockchain, virtual reality, and the metaverse will only spur increased data center growth.


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