8 Reasons Major Companies are Making a Move to Colocation


Demand for colocation data centers is expected to continue its upward climb throughout 2017, with the industry reaching a $36 billion status by the end of the year, according to a report by 451 Research.

It’s possible that the global colocation data center industry could even surpass that, fueled by a growing interest in data marketing, Internet of Things, and other trends that require companies to expand their data center capacities.

Even Fortune 500 companies are bypassing building out internal facilities in favor of partnering with colocation centers.

What is the draw? Here are 8 reasons why colocation is often the favored route for meeting an increasing demand for data center capabilities.

Reasons Why Colocation Makes Sense

  1. Scalability. One of the most often cited reasons companies give for looking into colocation is the ability to quickly scale up or down as demands dictate. This flexibility is especially critical for companies that have business cycles that are busier than others.With a scalable option, companies are able to pay based upon the amount of space and power they need at specific periods. Also, a company that is steadily growing can find that colocation is ideal for meeting their shifting demands.The time that it takes to build out a data center onsite could be prohibitive, not only because of cost. The lost opportunity to continue to operate while the data center space is being planned and developed could be costly in terms of lost revenue.
  2. Space limitations. As with the reason previously mentioned, many companies have space limitations. A colocation center eliminates the need to take up more real estate at the company’s facility. More critical data center functions could be dedicated to onsite facilities while other data center functions could be outsourced to a vendor.
  3. Maximize uptime. Unfortunately, legacy data centers — which often consist of older equipment that is prone to outages — can be both costly to replace and maintain. As a result, they are more susceptible to outages.This was evident in the airline industry, when several major airlines had to halt flights because of data center issues. Delta and United were among the airlines reporting outages, with one of those outages alone costing Delta $150 million.But it’s not an issue only facing airlines. About 25 percent of outages are caused by UPS system failure, while water, heat or CRAC failure accounted for 11 percent of outages, according to the Ponemon Institute’s 2016 Cost of Data Center Outages report.
  4. Dedicate resources to specific functions. With a data center onsite, you require more than equipment. Companies must provide IT staff and security staff to ensure that the data center is operating smoothly and securely. By outsourcing, a company can alleviate its need to have a staff on hand for maintenance.With a colocation facility, those services are already provided by IT specialists and technicians. This frees up the company to devote its resources and team to functions that help move the company forward, including innovations.
  5. Increased efficiencies. Many colocation centers invest in innovations that increase overall efficiencies, including cooling equipment, lighting and power. Since their data center facilities are designed to house specialized equipment, they tend to have a lower PUE. Throughout the industry, colocation has been focusing on ways to incorporate innovations to lower these costs on their clients’ behalf.
  6. Redundancies. Since many colocation facilities provide their clients access to multiple network providers, they can ensure a higher rate of redundancy. A mix of interconnectivity and dedicated cloud service providers allows them to get better rates as well as the ability to meet the demands of their clients.
  7. Separate location. When it comes to data center uptime, a company must always consider factors like natural disasters or other issues that can cause an outage. With a colocation facility that’s located off-premises, a company can include this option as part of their disaster recovery plan.
  8. More economical. Cost-savings is another factor that makes a colocation center an attractive alternative to building onsite. Colocation facilities are able to give companies the ability to share costs for real estate, the building, cooling equipment, storage, networks, and staff to provide a more economical alternative to independent data centers.

Choosing a Colocation Center

When choosing a colocation facility, it’s important to choose one based on several key factors. While many data center vendors provide the basics, it’s important to check for these essential characteristics.

  • Focus on innovations. The data center industry is quickly changing, accommodating innovations to support demands as well as increase efficiencies. Choose a provider that has demonstrated that they are focused on future technologies.
  • Network carrier redundancy. Most colocation centers will ensure competitive pricing through relationships with several network carriers but it’s always important to make sure you have assurance that this is the case with a provider. Ask about the arrangements with network carriers, again to ensure that you increase the rate of uptime.
  • A secure location. It’s important that a colocation center is located in an area that is not prone to natural disasters or security risks. Assess the location to determine how risk-prone it is.Also, ask for a summary of its security measures, including security cameras and security staff. With the attention being paid to cyber attacks, many companies fail to assess the risks associated with gaps in the physical location.
  • Compliance. Ask the vendor if it has certification from the Uptime Institute. Check to make sure. It’s also key to make sure the vendor has experience in maintaining compliance in your industry.

The independent advisory organization rates data centers based on a comprehensive assessment that includes infrastructure, efficiency and the reliability of a data center.

About Tony Johnson

Innovative helps you balance your business requirements, service levels, staff and infrastructure to make your IT as effective as possible. Tony Johnson is Vice President of Operations at Innovative and has been helping clients optimize their IT spend and operations since 1983.

Leave a Reply

Innovative Integration can help you optimize your IT infrastructure. Request a Consultation