Third party data centers explained

Many companies are moving HRMS data into third party data centers to gain a competitive edge, but what would that mean for your company and would your HR data be safe? What information, regulations and security risks do you need to be aware of?

Third party data centers are locations that specialize in keeping databases safe and online for customers. In layman’s terms it’s the equivalent of moving your server room to another location, but in reality there is much more to it. As data centers focus solely on storing data they invest in the latest technology to scale and are able to offer it to multiple companies so you are usually getting a better value for your technical dollars than buying hardware on your own.


As data centers are holding the data of multiple companies and much of it - like personal HRMS data -is highly sensitive, security is state of the art. I have visited a few data centers and it is the equivalent to a modern day Fort Knox with biometric checks for entry into secure areas, underground secure storage and well enforced perimeters and procedures.  

In the event of a natural disaster, data centers are replicating between distant sites so your data access will be repointed to a mirrored site so that your daily HRMS operations can continue uninterrupted.

Get to grips with Big Data and predictive analytics with our comprehensive guide to getting the most out of HRMS data.

Reliability and compliance

A third party data center will help you to pass audits as their service level agreements (SLAs) outline a high level of commitment to keeping your database up and running. Vendors usually are certified by their own external auditors through SSAE 16 or SOC2 examinations so these reports will also suffice for your auditors as it shows the IT and physical controls that are applied to handling your HRMS data.

Data privacy

Certain countries or regions have laws and regulations about where an organization’s data can be stored and how it can be accessed. If you are a global company operating in the European Union, the General Data Protection Regulation (GDPR) has been passed and will be in effect from 2018. As you form a data center strategy, inquire about data storage locations from vendors already as this will be a future requirement and especially relevant when HRMS data is at stake.


Scalability or the ability to ramp database storage up or down is a key advantage to using a data center. If you frequently acquire or divest populations, a data center helps to control costs by allowing you to buy up or reduce memory more easily than if you had to purchase it on your own.

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Heather Batyski

About the author…

Heather is an experienced HRMS analyst, consultant and manager. Having worked for companies such as Deloitte, Franklin Templeton and Oracle, Heather has first-hand experience of many HRMS solutions including Peoplesoft and Workday.

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Heather Batyski

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