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Colocation Service – Does Your Business Need It?

Admin Globaldots
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Today’s fast shifting economic environment pushes businesses to provide a great amount of flexibility in all areas. If a company is achieving growth, it’s infrastructure must be ready to quickly scale in order to maintain or offer an increased level of quality of their product or service. Considering the increasing relevance of IT departments, they often come under big pressure to deliver more services, in faster timeframes, with smaller budgets and leaner staff.

At one point, a company’s growth will bump directly into it’s own IT infrastructure limitations. That critical moment usually requires an efficient, long-term solution to be implemented. A rapid growth often involves the need for top performing IT infrastructure which can be expensive and require specific technical skills along with increased maintenance and internal logistic costs. Such an investment can be quite heavy and often far from the core business. Most struggle with data center transformations, and are looking for alternatives to traditional on-premises data center approaches. It’s then they often opt for colocation or cloud-based infrastructure.

Cloud Cost Optimization Case Study
Cloud Cost Optimization Case Study

What Is A Colocation Service

Colocation services (also known as “colo”) offer a secure environment for hardware and access to network connectivity that enables reaching customers worldwide. Typically, a colocation service  provides the building, cooling, power, bandwidth and physical security while the customer provides servers. Capacities in the facility are leased by the rack, cabinet, cage or room.

Colo data centers are no longer reserved for big corporations with unlimited resources as it was the case in the past. Many colos offer customizable services and have extended their offerings to include managed services that support their customers’ business initiatives. Colocation services also include:

  • Equipment inspection
  • Assembly and testing to verify equipment
  • Trained staff to consult
  • Inventory analysis
  • Burn-in and verification process to confirm equipment is correctly configured and systems are running properly

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Tweet this: Colo data centers are no longer reserved only for big corporations

For some organizations, colocation may be an ideal solution, but there are a few downsides to watch out when implementing this approach. Geographical distance can translate into increased travel costs when the equipment needs to be managed manually. Also, colocation customers can lock themself into long-term contracts, which prevents re-negotiations when prices fall.

Why Colocation

When using colocation services, companies own, use, and maintain their own equipment, while sharing the cost of power, cooling, communications, and data center floor space with other customers. It is proven to be a good choice in cases when complete control over the equipment is required (e.g. specific industry requirements).

A common reason to switch to colocation is the need to address the limitations of an existing data center. Rather than building a new data center, it’s easier to augment current capabilities by renting space in a colocation facility.
There are multiple reasons a business might choose a colo over building its own data center, but one of the main is the capital expenditures (CAPEX) associated with building, maintaining and running a large facility. In the past, colos were often used by private enterprises for disaster recovery. Today, they are especially popular with cloud service providers.

Tweet this: Limitations of an existing data center – main reason for a switch to colocation services

As Wes Swenson, CEO at C7 Data Centers noted in an interview:
“Smaller businesses use cloud resources to meet their IT needs. When companies reach about $100,000/month in cloud costs, they move to a colocation data center. Why should they keep spending this much money and don’t control the hardware, the systems? That’s the tipping point usually.”

Considering that performance, connectivity and uptime define colocation data centers, it’s much easier to focus on core tasks when knowing that IT infrastructure is handled in a facility that successfully hosts a variety of critical and complex IT solutions.

Cloud Vs Colocation

When talking about IT it’s essential to plan an infrastructure fit for the specific business, as a foundation to build on later. Businesses turn to cloud services for a number of reasons. Many customers simply want to offload infrastructure management and free up their IT staff. Some companies select a cloud provider because they enjoy the flexibility of being able to rapidly scale capacity up or down based on business requirements. There are some distinct differences between colocation and a cloud-based infrastructure service. Like colocation, cloud-based infrastructure services offer cost savings through the use of shared capacities. And this is where the resemblance ends.

With cloud services, the provider supplies and manages hardware infrastructure, including servers, storage, and network elements. This eliminates capital expenditures (CAPEX) costs and cuts operational expenditures (OPEX) costs, since the provider’s staff, not the customer’s IT staff, are responsible for day-to-day administration, routine maintenance, troubleshooting, and problem resolution.

On the other hand, colocation still requires customers to acquire their own servers, storage, switches, and software. Also, IT staff’s time will still be consumed by monitoring and managing the equipment and conducting backups and maintenance.
However, many colo providers now offer managed services that can be leveraged to monitor and manage infrastructure. It’s recommended to seek a provider that offers a wide spectrum of options and enables customers to pick the functions they want a third party to manage while maintaining control over them.

It’s when rapid growth and/or strict industry requirements kick in that the costs of cloud based services rise over the earlier mentioned tipping point, making it the perfect context to consider colocation as it provides a higher level of control over the infrastructure at relatively acceptable rates. If for anything, disaster recovery capabilities make it worth.


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Tweet this: Colocation services have great “disaster recovery” capabilities

The bottom line is that both colocation and cloud services offer viable alternatives to traditional in-house data center approaches. Based on the specific requirements of a particular deployment, each offers unique benefits and each has its own points to consider. It’s important to weigh compliance and privacy needs, need for direct control, as well as need for constant availability and uptime when deciding between colocation and cloud. Also, if problems arise while aligning colocation solution with other computing resources, colo providers often offer a complementary or hybrid cloud solution which enables even more control over IT resources.

To Sum Up

Colocation and cloud offer some comparable benefits, but each is best suited to satisfy different scenarios. There is no universal rule for which one to pick as both help cut some expenses through the use of shared facilities. The choice of one compared to the other should always be based on your specific requirements.
If you find yourself opting for colocation as more suitable for your business, make sure to plan ahead by providing your IT infrastructure with reliable facilities, operational expertise and flexible service options in order to make it easier to expand along with your business. Colocation gives you a dedicated environment for your IT hardware in a secure and globally connected facility.

Space, speed and power limits may always impede your ability to meet customer demands. To meet greater demand without the risk of service disruption and network outages, experts like GlobalDots provide immense colocation facilities near key backbones with dedicated and secure leasing environments capable of providing all the space, speed and power you could possibly need to grow your business along with all the expertise required for a successful deployment. If you would like to find out more about colocation services or how your business could benefit from it, feel free to contact our experts anytime.

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