What is a data center? Definition and types

As critical as they are to modern IT infrastructure, data centers remain the hidden heroes of everything we do. 

Every time someone hits the Internet or uploads a Reel to Instagram, they’re relying on the efficiency and reliability of a data center. 

These massive facilities do exactly what they sound like they would: they store, process, and manage vast amounts of data and house crucial IT equipment, including servers and networking devices, that support applications and services used in business operations.

That’s why businesses that use data centers can ensure reliability, efficiency, and scalability in their IT operations.

In this article, we’ll explore the details of data centers, including their role in modern IT systems and their components.

What is a data center?

A data center is a dedicated facility with computer systems and related components, like telecommunications and storage systems. It centralizes an organization’s IT operations and equipment, and makes it easy to ensure that it’s easy to secure data storage, processing, and management.

Modern data centers are also essential for hosting websites, managing emails, supporting cloud computing, and running enterprise applications without taking up all the extra space.

Initially, businesses relied on physical servers located on-premises. These traditional data centers require significant investment in hardware, maintenance, and management. 

As technology advanced, virtualization paved the way for Infrastructure as a Service (IaaS) solutions, where third-party providers offer scalable, on-demand computing resources over the Internet.

This shift to cloud-based infrastructure reduces capital expenditure, enhances flexibility, and enables businesses to quickly adapt to changing demands without managing physical hardware.

The role of data centers in modern IT infrastructure

Web 2.0 — the digital experiences we all know and use every day already — sets the stage for data centers. But it’s the rise of Web 3.0 — where AI and machine learning have more significant in delivering customized or user-focused content — that really explains why revenue projections for the data center market reached $416.10bn in 2024.

What’s even more telling is that the growth of network infrastructure dominated, compared to other segments, in 2024. Think IoT or the “Internet of Things” — network infrastructure connects all devices, including hardware and software components, in a way that enables “communication” between platforms. 

At the center — no pun intended — of this rise in network connectivity sits data centers, which makes them key differentiators for businesses that either rely on them or choose to develop their own.

Businesses and organizations relying on data centers to better manage their IT ops use these environments for:

• Data storage and management: Data centers provide secure and reliable storage solutions, accommodating large amounts of business data, including structured data (databases) and unstructured data (emails and multimedia files).
• Application hosting: Data centers host applications and services, such as websites, enterprise resource planning (ERP) systems, and customer relationship management (CRM) platforms. By centralizing these applications, data centers ensure better performance, availability, and maintenance.
• Disaster recovery: Data centers offer redundancy and failover capabilities to prevent data loss and ensure business continuity. Mechanisms like data backups, replication, and recovery plans are used to minimize disruptions.
• Cloud services: Data centers offer scalable and flexible cloud IT resources that can be rapidly adjusted to meet changing business needs. Cloud services enabled by data centers include Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) solutions.
• Big data and analytics: Data centers process large volumes of data, enabling businesses to gain insights and make data-driven decisions. They enable real-time analytics, machine learning, and artificial intelligence applications that require significant computational power and storage.

The components of a data center

A data center has several components that play a vital role in its operation. These elements can be broken down into five main categories.

1. Computing infrastructure

Computing infrastructure comprises servers, storage systems, and networking equipment.

• Servers: Servers are computers that perform essential data storage, processing, and management tasks. They can be physical machines or virtual instances in a cloud environment. Servers are often organized into clusters to distribute workloads and ensure high availability. There are different types of servers, including rack and blade servers, with varying processing power, memory, and other specifications.
• Storage systems: These include block storage devices, like hard disk drives (HDDs), solid-state drives (SSDs), and storage area networks (SANs) that store and manage data. File storage devices, like network-attached storage (NAS) systems, are also used to provide file-level access to stored data.
• Networking equipment: Routers, switches, and firewalls facilitate data flow and ensure secure connectivity between servers and external networks. Advanced networking technologies, like software-defined networking (SDN), can enhance network management and flexibility.

2. Power supply

Data centers must always be on and operational, so they require powerful equipment to run. This includes:

• Uninterruptible Power Supplies (UPS): Provide backup power to critical systems during power outages, ensuring continuous operation. UPS systems protect against power surges and supply immediate power until generators can take over.
• Generators: Backup generators serve as secondary power sources and can run for extended periods during prolonged outages. They require regular maintenance to ensure reliability.
• Power Distribution Units (PDUs): Distribute electrical power to servers and other equipment. PDUs monitor power usage and ensure even distribution to prevent overloads.

3. Cooling systems

Most data centers use a combination of air and liquid cooling to maintain proper temperature ranges. These can include:

• Computer Room Air Conditioners (CRAC): CRACs maintain humidity levels and optimal temperatures to prevent overheating and ensure hardware longevity. CRAC units are paired with raised floors or containment systems to optimize airflow.
• Chillers: Chilled water cooling is efficient and effective for high-density server environments in large data centers.
• Airflow management: Techniques like hot aisle/cold aisle configurations improve cooling efficiency by managing airflow patterns. Data centers can reduce energy consumption and maintain consistent temperatures by separating hot and cold air.

4. Security

Data center security is a critical concern as they store confidential business information. To prevent data leaks, data centers use physical and cybersecurity mechanisms, including:

• Physical security: Surveillance cameras, access controls, biometric scanners, key card access, and security guards are used to prevent unauthorized access to the physical facility.
• Cybersecurity: Firewalls, intrusion detection systems, and encryption safeguard data against cyber threats. Multi-factor authentication (MFA), secure access protocols, and regular security audits are also mandatory to protect sensitive data.

Top data center hosting providers also offer extra security services, such as real-time threat protection, active antivirus protection, and malware remediation.

5. Monitoring and management

To ensure reliability and up-time, data centers need constant monitoring and management. To do this, data center providers use:

• Data Center Infrastructure Management (DCIM) tools: DCIM tools provide real-time insights into power usage, temperature, and network performance, enabling proactive management.
• Automation and orchestration: Administrators can automate routine tasks and orchestrate complex workflows to enhance efficiency and reduce operational costs. Automation tools can handle software updates, backups, and load balancing, freeing up IT staff to focus on strategic initiatives.

Types of data centers

There are four main types of data centers, each designed to meet specific business and operational requirements. They are:

Enterprise data centers

Private companies own and operate enterprise data centers. They are physical data centers built on-premise to support internal IT operations and business applications.

On-premises data centers are tailored to meet the business’s unique needs, focusing on security, control, and integration with its IT infrastructure.

However, they also accrue high capital and operational expenses, requiring significant expertise and resources to manage and maintain.

Managed services data centers

These data centers are operated by third-party service providers who maintain the infrastructure on behalf of their clients.

Providers like Liquid Web offer comprehensive services for managed servers, including infrastructure management, security, monitoring, and support so businesses can focus on high-value activities.

Managed data centers reduce operational complexity and costs, give access to expert management and support, and enable businesses to leverage advanced technologies and best practices.

Cloud data centers

Cloud-based data centers offer scalable computing resources and services over the Internet. They are operated by cloud service providers (CSPs) like Liquid Web, Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.

These data centers are highly scalable, flexible, and managed environments that support cloud services. Managed cloud providers reduce the burden on IT teams while offering on-demand scalability, reduced capital expenditure, and global reach.

Colocation data centers

Colocation data centers or “colos” are large data center facilities that lease space to multiple companies, providing the physical infrastructure and services they need to host their IT equipment.

They have a robust infrastructure that allows businesses to distribute their hardware geographically. Colocation data centers are a cost-effective and scalable solution with reduced maintenance responsibilities.

Design considerations for data centers

Designing a data center requires carefully evaluating five crucial elements to ensure efficiency and reliability. These are:

Location

The physical location of your data center depends on three factors:

• Proximity to power sources: Data centers are often located near power plants or renewable energy sources to secure consistent electricity and reduce transmission losses.
• Climate conditions: Cooler climates can reduce cooling costs, while areas prone to extreme weather may require additional protective measures.
• Risk of natural disasters: Locations with low risk of natural disasters are preferred to ensure continuous operation. Data centers in high-risk areas incorporate additional structural reinforcements and disaster recovery plans.

Scalability

For a data center to be scalable, they must have:

• Modular design: Modular data centers can be quickly deployed and scaled to match changing requirements, offering flexibility and cost savings.
• Flexible infrastructure: Dynamic infrastructure makes it easier to integrate new technologies and scale resources without significant disruptions. Virtualization and containerization technologies can enable efficient resource allocation and management.

Energy efficiency

For optimal energy usage, a data center requires:

• Efficient cooling systems: Techniques such as free cooling, liquid cooling, and advanced HVAC systems are employed to minimize energy consumption and environmental impact.
• Renewable energy sources: Use solar, wind, and other renewable energy sources to lessen your carbon footprint and reduce operational costs.

Redundancy and reliability

Data centers must always be online and avoid failures that lead to data loss. So, while designing a data center, businesses must consider:

• N+1 and 2N redundancy: Ensure critical systems have backup components, reducing the risk of downtime. Redundant power supplies, cooling systems, and network connections are essential for high availability.
• Tier classification: Data centers are classified into tiers, with higher-tier data centers offering greater uptime guarantees and reliability but requiring more investment in infrastructure.

Connectivity

A data center needs solid network infrastructure to adequately handle business demands. So, they must have:

• High-speed Internet: Fast internet connectivity for seamless data transmission. Data centers often connect to multiple internet service providers (ISPs) to ensure optimal performance.
• Interconnectivity: Peering agreements and direct connections to major cloud providers to enable efficient data exchange, reliability, and hybrid cloud deployments.

Standards in data center design

The Uptime Institute’s Tier Standard is a widely recognized classification system that rates data centers based on their infrastructure redundancy and fault tolerance. It provides a comprehensive framework to evaluate the reliability and availability of data center facilities.

According to the standard, there are four data center tiers.

Tier I

Tier I data centers provide basic capacity and have no redundant components. They are suitable for small businesses with minimal uptime requirements or limited budgets.

Key features:

• Single power and cooling path.
• A UPS for outages and spikes.
• Dedicated cooling equipment.
• No redundancy in power and cooling systems.
• Basic protection against disruptions.

These data centers are susceptible to disruptions from unexpected outages or failures due to a lack of redundancy. Tier I data facilities require a complete shutdown and planned downtime for maintenance and repairs.

Tier II

Tier II data centers include redundant capacity components, providing an additional layer of protection.

Key features:

• Single path for power and cooling distribution.
• Redundant components for critical systems (for example, UPS, chillers, generators).
• Improved protection against equipment failures.

They are appropriate for businesses that want higher reliability than Tier I but have budget constraints. However, maintenance activities can still cause disruptions.

Tier III

Tier III data centers are concurrently maintainable, meaning they have redundant components so that maintenance can occur without impacting operations.

Key features:

• Multiple power and cooling distribution paths.
• Concurrent maintainability allows for maintenance without downtime.
• Redundant critical components and systems.

A Tier III data center facility is ideal for businesses requiring high availability, such as e-commerce sites, financial institutions, and large enterprises.

Tier IV

Tier IV data centers have the highest level of redundancy and reliability. They are built to be fault-tolerant and have multiple independent and physically isolated systems. They can withstand and manage the failure of a component without affecting operations.

Key features:

• Multiple active power and cooling distribution paths.
• Fully redundant systems, including power, cooling, and network connectivity.
• Fault-tolerant design ensures continuous operations even during failures or maintenance.

These data centers are ideal for mission-critical applications and industries that cannot afford any downtime, such as large financial institutions, government agencies, and telecommunications providers.

These standards can help you build data center infrastructure that meets business, uptime, and security requirements.

Data center design also requires adherence to other universal standards, like the ANSI/TIA-942 Standard for telecommunications infrastructure and the ISO/IEC 27001 for information security management.

Get tailored server solutions with Liquid Web

Data centers provide the necessary infrastructure to handle data and support critical business functions. Understanding their types, components, and design considerations helps businesses create effective data infrastructures that streamline operations and drive innovation.

Organizations can choose from 100,000+ servers offered by Liquid Web’s data center hosting solutions to create reliable, efficient, and scalable IT infrastructure.