A data center is a facility that centralizes an organization’s IT operations and equipment for the purposes of storing, processing and disseminating data and applications. Because they house an organization’s most critical and proprietary assets, they are vital to the continuity of daily operations. Consequently, security and reliability are among any organization’s top priorities.
What Does a Data Center Do?
A data center is designed to handle high volumes of data and traffic with minimum latency, which makes it particularly useful for the following use cases:
- Private cloud: hosting in-house business productivity applications such as CRM, ERP, etc.
- Processing big data, powering machine learning and artificial intelligence.
- High-volume eCommerce transactions.
- Powering online gaming platforms and communities.
- Data storage, backup, recovery, and management.
Core Components
Data center architectures and requirements can differ significantly. For example, a data center built for a cloud service provider like Amazon will have very different infrastructure requirements than a government facility dedicated to securing classified data.
Data Center Computing
Servers are the engines of the data center. On servers, the processing and memory used to run applications may be physical, virtualized, distributed across containers, or distributed among remote nodes in an edge computing model. They must use processors that are best suited for the task, e.g. general purpose CPUs may not be the best choice to solve artificial intelligence (AI) and machine learning (ML) problems.
Data Center Storage
They host large quantities of sensitive information, both for their own purposes and the needs of their customers. Decreasing costs of storage media increases the amount of storage available for backing up the data either locally, remote, or both. Advancements in non-volatile storage media lowers data access times. In addition, as in any other thing that is software-defined, software-defined storage technologies increase staff efficiency for managing a storage system.
Data Center Networks
Datacenter network equipment includes cabling, switches, routers, and firewalls that connect servers together and to the outside world. Properly configured and structured, they can manage high volumes of traffic without compromising performance. A typical three-tier network topology is made up of core switches at the edge connecting the data center to the Internet and a middle aggregate layer that connects the core layer to the access layer where the servers reside. Advancements, such as hyperscale network security and software-defined networking, bring cloud-level agility and scalability to on-premises networks.
Types
When it comes to data centers, one size does not fit all. Its needs vary depending on their structure, physical limitations, density requirements and more. Here are four common types including onsite, colocation facilities, hyperscale, and edge data centers, as well as their use cases and industry trends.
Colocation Facilities
Colocation facilities rent or lease space to multiple organizations to house their data centers. Many organizations utilize a colocation facility, commonly referred to as a colo, for their equipment to benefit from their cooling, physical security, up-time and monitoring guarantees, maintenance and locations.

There are two types of colocation facilities: retail and wholesale. Retail colocation facilities have smaller spaces for rent and only provide infrastructure equipment, such as the rack, for rent. These facilities also maintain the switchgear, generators, cooling, UPS (Uninterruptible Power Supply) and other equipment that keeps the location running. Wholesale colocation facilities rent out the entire unit and provide larger spaces. These facilities are typically better for companies that need a lot of space and may expand in the future. Both types of colocation facilities lease power as a cost per kilowatt.
Hyperscale Data Centers
This centers are large and can house thousands or millions of servers. These data centers are meant to be scaled, which can be done by increasing the power of the system or adding more racks and equipment. They are a popular option, and with the increase in data storage needs, these they will only continue to expand in size.
Enterprise Data Center
Enterprise data centers are private facilities. A single organization owns and operates them to meet its own IT needs. These data centers work well for companies that need customized networks. They also suit organizations that handle large amounts of data or traffic and can benefit from economies of scale.
Organizations often maintain enterprise data centers for several reasons. These include regulatory compliance, privacy protection, high performance, strong security, and lower costs. They design these data centers to support their specific applications and processes. Depending on needs like power, water, connectivity, and security, they place the centers either on-site or off-site.
In an enterprise data center, an in-house IT department manages the servers, storage, and network equipment. Meanwhile, the power equipment, cooling infrastructure, and security systems may be managed either internally or outsourced to a third-party through a facility management contract.
Organizations are moving toward a hybrid IT model. This approach combines cloud services with data center operations. They use both on-premises infrastructure and colocation facilities. Enterprises migrate to the cloud to scale more easily and launch new applications faster. Many also face resource underutilization. Poor resource allocation, unoptimized workloads, and limited visibility into usage cause this problem.
Edge Data Centers
Edge data centers, also known as micro data centers, are smaller, decentralized facilities that provide compute and storage in a location closer to where data is being generated and used. They are situated near their intended users, allowing for real-time data processing and analysis. Because they perform this analysis closer to the source of data creation, response latency is reduced and bandwidth is optimized, which facilitates the development of new applications. This is in contrast to traditional centralized data centers that rely on multiple networks and data centers for processing.
The term “edge” refers to the location where these types of data centers typically deploy, closer to the point of connectivity. You can deploy them as standalone facilities or in various environments, such as telecommunications central offices, cable headends (local distribution points), the base of cell towers, or directly on an enterprise’s premises. In terms of scale, they serve individual power capacity requirements from 50 kilowatts (kW) to 500 kW of power capacity, or 5 to 50 racks. Multiple edge data centers can be interconnected to increase capacity, improve resiliency, and enable workload migration within a local area.
Modular Data Centers
They are standardized buildings that are pre-engineered and prefabricated, complete with power and cooling infrastructure, and used to house computer servers and network equipment. They come in various types, including container data centers, prefabricated data halls, and prefabricated power & cooling modules.
Modular data centers serve two main purposes: to cut construction time and reduce deployment costs. They save time by moving traditional on-site construction work to off-site factories. They lower costs through standardization and by minimizing the need for on-site labor.
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