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Server Room vs Data Center: Which is Best for Your Business?

Server Room vs Data Center: Which is Best for Your Business?

Early in the wave of the development of the Internet, corporate data servers were typically located on-premises, and every business that needed a server was forced to invest significant capital. Servers required their own infrastructure, hardware, and maintenance solutions, for physical servers sitting in a dedicated room/area of the office.

It was resource-intensive and expensive, but thanks to innovations in cloud technology and the increasing availability of lightning-fast fiber connectivity, other options have opened up in recent years. While your unique circumstances may vary, we can provide you with information in the data center vs. server room debate.


Server Room vs Data Center: Which is Best for Your Business?

Commercial data centers are entire buildings devoted to the housing, storage, and support of a large amount of server hardware and networking equipment. Several organizations often share space in data centers. On the other hand, a server room is a room specifically designed and allocated to store servers on your premises.

So which solution is best for your company? How should you decide whether you're better off with a data center service or a dedicated server room?

Of course, each company has different needs, and what works best for one company is not necessarily the best solution for another. Let’s consider the advantages and disadvantages of each approach and weigh the pros and cons to determine what makes the most sense for you.

On-Site Server Rooms


The advantages of maintaining your server facility all come down to the fact that it's yours. All of the responsibility falls on you, but you get to enjoy all of the benefits that come with complete control in exchange. And you can walk down the hall or take the elevator downstairs and physically touch the servers.

You'll be the sole manager of your facilities, and you can modify your system on your terms to accommodate any shifting needs, including expansion, as your business scales up. That versatile customization can be particularly useful if your system is unusually complicated, large, or includes many diverse applications.

You can also manage your security – which, again, grants you control over your system in a way that moving it offsite cannot provide. And since DDoS attacks are on the rise, you'd no longer have to rely on someone else to protect your network.


The downsides of maintaining your server room extend well beyond the substantial workload involved, although this parameter is surely significant. You may want your IT team to focus on initiatives that directly relate to your business. But spending time on maintaining the health of the server stacks and physical infrastructure as well splits their attention.

Backups are less effective when your data is stored in one physical location. In the event of theft, fire, flood, or another disaster, you could lose everything with no recourse for recovery.

Moreover, keeping your network local makes it harder to expand your business to new locations. When you open up new branches, you'll need to find good solutions for everyone to connect to headquarters instead of both locations connecting to a facility made for offsite networking, which is the case with data centers.

Up-front spending is significant when you invest in your own on-site servers. It's generally difficult to know how much capacity you'll need for growth. This means you could purchase a system that's either more powerful than you need or that isn't able to grow as your data needs expand.

Data Centers


If you are running a small business or just starting up your business, you may find value in keeping your servers in a data center. The combined buying power with other companies taking advantage of the same services helps to keep your costs down.

Since data centers necessarily have redundant backup systems for network access, electricity, and climate control you are also far less likely to experience network outages. Many even have their own backup power generators, which means that in the case of a local power utility outage, they remain up and running – and through no extra effort on your part.

Depending on the nature of the data center, you may or may not have the ability to determine when your scheduled maintenance downtimes will be, and you may or may not be able to choose what hardware is being used for your server stacks. For many businesses, the colocation model is extremely attractive, as it allows you to bring your own hardware to the shared facility and can save you money.


Although the financial burden involved with infrastructure and maintenance for an on-site server can be significant, your "upfront" costs for moving to a data center can be surprisingly high. If you opt for a colocation data center, where you provide both hardware and software, major spending may be involved.

Even when the data center provides all of these resources, you will have to pay initial deposits and setup fees. Note that these fees may begin to feel negligible over time, especially compared to the ongoing cost of an in-house server stack.

When you remove your server from your premises, you will lose a certain degree of potential for in-house oversight and control. If you completely outsource your server stack, you are fully dependent on the data center for maintenance, security, and uptime. This may well be to your advantage, but many prefer to depend less on remote third parties.

Data Centers vs. Server Rooms: Key Considerations

We've explored the pros and cons of each solution. Now, let's go over some of the key considerations you should keep in mind when choosing your data solution and how data centers and server rooms stack up for each.


Cost is always an essential consideration in any business decision. Let’s look at some associated costs for data centers and on-site server rooms.

  • On-Site Server Room:
    You will need to invest in hardware, software, and appropriate facilities upfront for an on-site server room. Your server room will need appropriate air conditioning, humidity control, fire suppression, etc.
    In addition to upfront costs, you’ll need to consider ongoing maintenance, hardware upgrades, security measures, and support staff costs. 
  • Data Center:
    When you work with a data center, you need to consider upfront costs such as deposits and setup fees. Additionally, you will need to pay monthly fees to have your data hosted in a data center. These fees will vary based on your required bandwidth, the number of supported IP addresses, and more.  


When it comes to data, having strong, reliable security is vital. Your data may include anything from HIPAA-protected medical data to customer credit card information to sensitive company data and more. What are the security features of data centers vs. server rooms?

  • On-Site Server Room:
    Security and maintenance are fully under your control when you pursue an on-site server room. You'll need to invest in physical security features (such as a security card or biometric access locks on your server room door) in addition to digital security. 
  • Data Center:
    With an outsourced data center, you lose most in-house control over security. You will be fully dependent on the security measures of your data center. Fortunately, most data centers have strong security features and practices. 


The last consideration we’ll discuss is responsibility. What is the difference between server rooms and data centers regarding responsibility, maintenance, and management?

  • On-Site Server Room:
    If you pursue an on-site server room, all responsibility for maintenance, performance, security, and more falls on your shoulders. The upside is that you have full control over your data management and operations. The downside, of course, is the associated cost (in both dollars and work hours).
  • Data Center:
    When using a data center, your data management is effectively fully outsourced. This means you have little responsibility for maintenance, redundancies, or security. Though this means you lose some control over certain processes, you also gain the experience and performance of the data center’s facilities and personnel. 

Future Trends and Emerging Technologies in Server Infrastructure to Consider in the Server Room vs. Data Center Debate

Understanding future trends in server infrastructure is crucial for businesses to make informed decisions and stay ahead. Let's explore key trends shaping the future.

1. Edge Computing

Edge computing is a key trend in server infrastructure, moving data processing closer to the source for reduced latency and improved performance, crucial for real-time applications like IoT, autonomous vehicles, and VR.

2. Hybrid Cloud Solutions

Hybrid cloud solutions offer businesses flexibility and scalability by combining the benefits of public and private clouds. This approach optimizes resource utilization, enhances security, and seamlessly adapts to changing business needs.

3. Advances in Data Center Efficiency

Energy consumption and environmental sustainability have become increasingly important considerations. Innovations such as liquid cooling, modular designs, and renewable energy sources are being adopted to enhance the energy efficiency of data centers.

Additionally, advancements in artificial intelligence (AI) and machine learning (ML) are enabling predictive maintenance and optimization of data center operations, resulting in higher reliability and lower operational costs.

4. Software-Defined Infrastructure (SDI)

SDI revolutionizes server infrastructure management by abstracting hardware and enabling greater flexibility, agility, and scalability. Businesses can quickly adapt to workloads, automate provisioning, and optimize resource utilization for improved efficiency and cost savings.

5. Containerization and Microservices

Containerization and microservices are transforming application development and management. These technologies offer lightweight, portable, and scalable environments, enhancing developers' efficiency.

Businesses can achieve greater agility and scalability by breaking down monolithic applications into smaller services. This trend is driving the adoption of container orchestration platforms like Kubernetes for managing workloads efficiently at scale.

By staying abreast of these upcoming trends and cutting-edge technologies, businesses can strategically invest in server infrastructure to thrive in the ever-changing digital environment, setting themselves up for success.

Server Room vs Data Center: Making the Best Decision for Your Business

When it comes to the server room vs data center debate, there are a lot of factors to consider, many of which come down to personal preferences. Therefore, the best way to make this decision is to consult with an expert who can assist you in determining which of these pros and cons should outweigh the others, given the specifics of your case. We'd be glad to be that consultation partner if you're in the Washington, D.C. metro or surrounding area. Just give us a call.

To help educate you, we've created a guide with the 10 questions you need to ask before signing with a data center, and we'll explain why each is essential to getting you the right choice for your business. Download your free copy of 10 Questions To Ask Before You Buy Data Center Services For Your Business now.


Tom Collins
Post by Tom Collins
May 21, 2024
Tom is the Director of Enterprise Sales & Marketing for Atlantech Online. He has over 20 years of professional experience in the Internet Service Provider industry and is known for translating technology into positive results for business. A native of Washington, DC, a graduate from University of Maryland (degrees in Government & Politics and Secondary Education), Tom is also a five-time Ironman finisher.