The Great Co-location Debate

With cloud computing growing in popularity, SMBs are questioning whether it is more practical to co-locate their data centers or completely bypass that option and head into the cloud? First, let’s briefly clarify the two:

Data center co-location: Typically provided as a commercial service, this option allows SMBs to rent data center space from a third party facility that provides necessary pipe (network connectivity to the Internet) and ping (network response). Space is usually leased as individual rack units, cabinets, cages, suites, rooms and facilities

Cloud computing: By moving to the ‘cloud,’ SMBs have the ability to store and process data over the Internet. For clarity, Gartner defines cloud computing as “a style of computing where scalable and elastic IT capabilities are provided as a service to multiple customers using Internet technologies”

Co-location addresses data center facilities needs. Cloud computing includes IT infrastructure as well as data center facilities, all delivered as a service. Both options provide network and cost-saving benefits, and SMBs can benefit greatly from either solution.

Data center co-location provides SMBs with the opportunity to house dedicated computing infrastructure (servers, network devices) instead of building a data room or data center, allowing them to save money on costly facilities infrastructure and maintenance. On-site data centers can require high overhead investments which are often difficult to justify.

Co-location offers SMBs customizable services to ensure they are getting exactly what they need. In turn, networks, bandwidth, redundancy and connectivity become less expensive and are often more reliable than on-site, owner-operated facilities. Data Center co-location also allows businesses to free up internal networks and increase Web access speed, and the reduced power consumption saves money. Additionally, many co-location facilities are moving toward green power sources such as solar or wind to offset the carbon impact of their energy use.

Many co-location providers also offer additional technical support, which is beneficial to smaller businesses that may not have the budget to employ experts to address challenging IT issues. However, it is important to understand the limitations noted in the service-level agreement, such as the availability of the provider’s support team. While some co-location providers offer around the clock support, others do not. If that is the case, work with the provider to obtain off-hour access to the facility and have a back-up plan in place.

The data center co-location marketplace operates under boom or bust economics. In 2001-2003, data center space became a commodity, leading to increased expansion. Looking ahead, it is difficult to determine whether there are enough data centers to meet the growing demand. Much like other types of real estate, there are cycles, so if you expect your business to grow, plan ahead. Choose a provider that has high speed connectivity to another facility and has an expansion plan in place. Contracts vary, so be sure to find the one that is best suited for the unique needs of your company.