When businesses consider setting up an on-premise data center, they often focus on the immediate benefits, such as control, security and customization. However, many overlook the hidden costs that come with managing an in-house data center. From 24/7 staffing to capital investments and scalability challenges, the true cost of an on-premise setup can be much higher than anticipated.
In this blog, we’ll break down the real expenses of running an on-premise data center and explore why colocation services can be a smarter, more cost-effective alternative.
1. The High Cost of 24/7 Manpower
Running an on-premise data center requires round-the-clock staffing, typically in three shifts, to ensure uptime, security, and maintenance. This means:
- Salaries for IT staff, security personnel, and facility managers
- Training and retention costs (high turnover in IT ops is common)
- Overtime and emergency call-outs
Unlike colocation services, where the provider handles staffing, an in-house setup means ongoing labor expenses that add up quickly.
2. Operational Costs & Overheads
Setting up an on-premise data center requires massive upfront investments, including:
- Cooling systems, power backups and physical security
- Real estate and construction costs
Additionally, technology depreciates rapidly. In 3-5 years, your equipment may become obsolete, forcing costly upgrades. With colocation, you can avoid these capital expenses. As a third party provides the infrastructure, you only pay for the space and power you use.
3. Compliance & Liability
Managing an on-premise data center means taking full responsibility for:
- Regulatory compliance (ISO, SOC, GDPR, etc.), achieving certifications is expensive
- Risk of downtime & data loss (your team bears the liability)
In contrast, a colocation services provider comes with enterprise-grade infrastructure, built-in redundancy, and compliance-ready facilities, reducing your operational risks.
4. Scalability Challenges
Scaling an on-premise data center is slow and expensive. Need more capacity? You’ll have to:
- Expand physical space (construction & permits)
- Reconfigure power & cooling
With colocation, scaling is seamless. You can increase or decrease resources on demand without incurring huge capital outlays.
5. Future-Proofing & Expertise
Technology evolves fast. Maintaining an in-house data center means:
- Constant upgrades to keep up with advancements
- Hiring specialists for security, networking, and cloud integration
- Managing unforeseen costs
Colocation services providers like NES DATA eliminate these headaches with future-ready infrastructure, 24/7 expert monitoring, and flexible solutions that grow with your business.
Why NES DATA is the Smarter Choice for Colocation
At NES DATA, we understand the hidden costs of on-premise data centers, which is why our colocation services are designed to cut your expenses while delivering enterprise-grade reliability.
- No subcontracting: Our in-house team handles everything, ensuring quality & accountability.
- Cost-efficient builds: Our data centers are optimized for performance & affordability.
- Scalable, secure, and compliant: Focus on your business while we manage the infrastructure.
Conclusion
While on-premise data centers offer control, the hidden costs, manpower, capital, compliance and scalability make them a financial burden for many businesses. Colocation with NES provides a cost-effective, flexible, and hassle-free alternative, allowing you to scale efficiently without the heavy investments.
Ready to optimize your data center costs? Contact NES DATA today to explore our colocation solutions!