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Colocation has become a hot topic in information technology—the potential benefits of colocating their data center resources, especially for smaller companies, are myriad. Nevertheless, despite these numerous potential benefits, such as reliability, environmental friendliness, and cost savings, many companies appear to be turning to colocation for a few specific reasons.
Companies that require data storage and other computing resources can choose to construct all the necessary facilities onsite to provide these resources under company management. This approach requires installation and maintenance of uninterruptible power supply (UPS) systems, cooling systems, and other infrastructure. On the other extreme, all data center resources can be fully outsourced to the cloud, which provides data storage and computing services. In between these two extremes is colocation—the company owns and (often) manages its own servers and software, but it “outsources” the other data center infrastructure. The colocation provider divides the cost of security, uninterruptible power, equipment cooling, maintenance of network connections, and equipment monitoring among a number of customers. Thus, none of the client companies is required to bear the full brunt of data center infrastructure costs, thereby reducing the cost of maintaining data storage and computing resources.
Colocation allows a company to bypass much of the hassle of maintaining a data center while retaining control of server equipment and software. A number of considerations are cited both by colocation providers and by other parties. Of course, cost is one consideration—as a form of outsourcing, colocation offers certain cost benefits to companies looking for something slightly less intensive than a company-owned and company-managed data center. Another consideration is environmental friendliness. Colocation eliminates the need for every company to have its own data center; the colocation provider can centralize utility hogs such as equipment cooling (which, in many data centers, requires tremendous amounts of water and electricity) and thereby reduce the relative usage of these resources. Colocation facilities can also provide around-the-clock security—since data center maintenance is the provider’s business, offering comprehensive security and monitoring services can be a significant draw for companies. In addition, network connection redundancy is another aspect of a good colocation provider that can be of benefit to companies.
In late 2008, Hosting.com (a provider of cloud-based and colocation services) conducted a colocation survey of over 200 companies of various sizes and from a range of industries. These companies included some of the provider’s own customers. According to IP Business (http://www.ipbusinessmag.com/), 67% of respondents identified availability and reliability concerns as a reason for choosing to colocate. According to the online publication Focus (http://www.focus.com/), respondents also cited improved performance and efficiency (49% of respondents) as well as lower costs (45%) as reasons for colocating. In addition, Focus reports that the survey showed a general lack of interest in environmental considerations when companies choose to colocate. The survey also indicated that distance is an important consideration for colocation: over half (55%) of respondents chose a colocation provider within 25 miles of their business.
When choosing a colocation provider, the Hosting.com survey cites bandwidth, security, and redundancy as the most important factors that guide companies. Additional factors include power concerns, potential for expansion, and monitoring.
Of course, each business has its own particular reasons for colocating and for choosing a specific colocation provider. For instance, a smaller company with less revenue might not consider distance as important a factor as a larger company might—for the smaller company, searching a larger area for a colocation provider could be the key to lower costs, which may be of greater concern than proximity. For a larger company with more extensive needs, proximity may outweigh cost concerns, as the ability to quickly upgrade or replace equipment may be paramount.
The recent economic downturn has been a significant driver of outsourcing data-center-related resources, and colocation providers have benefited. By offering companies reduced costs compared to operating a full data center, along with security, redundancy, and other benefits, colocation is a middle-of-the-road option for companies looking to maintain some control over their servers and software. Although every company has its own reasons for colocating, the late-2008 Hosting.com survey indicates that several factors such as reliability and availability, performance and efficiency, and lower costs are some of the most-cited reasons. In addition, companies tend to look at bandwidth, security, and redundancy (among other considerations) as the most important criteria for choosing a colocation provider.
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