Asking a board of directors for several hundred million dollars to obtain new data center capacity is one of the least popular requests a senior technology executive can make. As one CIO said, “I have to go to the executive committee and tell them that I need a billion dollars, and in return I’m going to give them exactly nothing in new functionality— I’m going to allow them to stay in business. I’m not looking forward to this.”

Investments in data center capacity are a fact of business life. Businesses require new applications to interact with customers, manage supply chains, process transactions, and analyze market trends. Those applications and the data they use must be hosted in secure, mission-critical facilities. To date, the largest enterprises have needed their own facilities for their most important applications and data.

How much data center capacity you need and when you need it, however, depends not only on the underlying growth of the business but also on a range of decisions about business projects, application architectures, and system designs spread out across many organizations that don’t always take data center capital into account. As a result, it’s easy to build too much or to...