As we spend more time online and in the process of sharing and exchanging of digital information is becoming more crucial to ensure the running of businesses. Digital exchange requires huge computing and networking equipment which is located in a centralized physical location known as a data center.

A data center is a specialized computer room that houses storage and computing equipment for a company or organization. A data center's core components comprise servers that provide the power of processing to transform raw data into usable information, and storage devices which hold the data on either robotic tapes or hard disk drives. A data center also depends on networking and communications equipment, such as routers switches and miles of cables to aid in the flow between servers.

In the 1990s, as IT operations grew and companies began to employ cheap networking equipment to house their networking hardware in an central location and the term "data center" was first used. Companies can either build their own data center on their premises or contract with a third-party provider of data center services that offer managed and colocation. Third-party solutions are typically more efficient in terms of energy and cost. They are also a cheaper alternative to facilities on premises.

Many of these third-party options also allow greater flexibility for the management acplc.net of policies. For instance the data center may offer multiple environments for policy management in one location, allowing IT to limit data workloads by establishing distinct policies that meet requirements for compliance across geographical regions and business units. This can dramatically reduce security risks and improve overall information governance.