BUSINESS FACTORS THAT DETERMINE TIER SELECTION

A guide to making an appropriate business decision on an important investment.

In an earlier post, I discussed how and how important it is for Data Centers to be classified. Click here to read it. A new tab or window will open.

In this post, I'll discuss criteria for determining tier selection. I hope you find it useful. As always, I welcome your feedback.

Tier-1 and –2 are typically built to meet short-term requirements. Cost and speed of implementation override uptime (i.e., availability) and life cycle requirements.

Tier-3 and –4 are strategic investments that emphasize uptime and long-term viability. These centers have a much longer useful lifetime than its end-user equipment. These centers liberate the company to make strategic business decisions concerning growth and technology. A transportation company can expand its operations across the country knowing that every regional office it establishes is backed up by its Tier-4 infrastructure.

Tier-1 is appropriate for:

1. firms where IT only enhances internal operations. The firm can continue to run for an extended period without IT presence
2. businesses that don’t anticipate a severe financial impact from prolonged downtime
3. companies that plan to abandon the center when their IT requirements increase.

Tier-2 is appropriate for:

1. Internet Service Providers (ISPs) that don’t guarantee their clients a high uptime rate in their Service Level Agreement (SLA)
2. firms whose IT requirements are mostly limited to standard business hours, e.g., Monday to Friday from 8 to 5. The Data Center can schedule its maintenance schedule around these hours.
3. institutional or educational organizations that won’t suffer meaningful impact (libraries or schools)businesses on a tight budget that want to store their data off-site (electronic vaulting). A smart strategy for them is to plan to take their chances with Tier-2 only temporarily. They should plan and budget to switch after a planned and limited duration (months instead of years) firms that plan to abandon the center when their IT requirements increase.

Tier-3 is appropriate for:

1. companies that require IT services to support mission-critical processes and can tolerate short (less than 12 to 18 hours) outages (e.g., hospitals)
2. firms that have high-availability requirements and are willing to accept the financial impact of unexpected downtime
3. companies that designed their Tier-3 sites to be upgraded to Tier-4.

Tier-4 is justified for:

1. large companies in highly competitive industries
2. organizations that require 24/7 uptime due to laws and regulations (e.g., banks and financial services)
3. internet-based businesses that derive their revenue from e-commerce 24/7

Reference: The Uptime Institute