Data center workloads are making a complete technology and infrastructural shift not only to cloud, but they are increasingly adopting the new infrastructure solution known as colocation facilities that act as an alternative for the privately owned data centers. What exactly is colocation for enterprises,  colocation facility is a data center in which business can rent space on located servers and other computing hardware that they can purchase but is managed by the colocation. The colocation data center provides users with the building, cooling, power, bandwidth and physical security, certain space in the complete infrastructure is being leased out it can be either be a rack, cabinet, cage or room. Many colocations have started out as a managed services provider but continue to offer many of the specialized services.

Some of the most prominent providers include Digital reality Trust, CenturyLink, Equinix, and NTT Communications, and there are many players that serve only the localized IT industry or special requirements. Unlike the data centers provided by major cloud vendors such as Amazon and Microsoft are being offered at a greater price and in the major metropolitan areas.  Rick Villars, Vice President of Data centers and cloud research at IDC added that the colocation has been present in the ecosystem of proofing for a very long time, but their initial use cases were for the web servers. Over the years, what has changed now is the ratio of customer facing or network facing have increased at higher rates, and companies are increasingly acquiring the assets.

Looking at the colocation advantages

Jim Poole, Vice President of business development at Equinix who has worked with several colocation requirements of businesses added that homegrown data centers are often sized incorrectly that are either look to add way too much towards the capacity or too little. Customers would always come and ask Jim whether he would like to buy the data center because I am using only 25 percent of it. Poole added that the average capital expenditure for the standalone enterprise’s data centers that are not the part of the corporate campus adds up to $9 million. Companies increasingly realize that it makes sense to buy racks of hardware but place then under someone else’s security facility that satisfies all the requirements of power and operation. It’s the same argument that we have when it comes to cloud computing but at the physical infrastructure level.

Mike Satter, Vice President for OceanTech, a data center decommissioning service provider, added that enterprises should absolutely outsource their data center construction or go for the colocation route. As the service provider works on the building data center solutions, there is some provider that work on specializing in the data center design. He added that the subsequent shift in the data center solutions is to mostly satisfy the environment requirement from someplace else. For every decommissioning done for a certain business, the same business is looking to add data center at someplace else adding to another environment. With new technology development we have seen and hardware out there now, the servers can do the same work. It means to reduce the footprint of the data and the hardware cost for the complete server.  Often the closure means that we are moving to completely new location, Ocean Tech recently decommissioned a complete private data center for major media outlet that involved completely shutting down the data centers in New Jersey that held 70 racks of gear. The firm was moving all its application on the cloud, but in the end it had moved them to colocation facility in New York City.

Costing for cloud and colocation

Many companies had decided to adopt cloud solutions, but at the last moment, they changed their minds when they saw that what it would cost while moving their workloads out. Cloud providers can kill you with guidelines and costs because your data is in their infrastructure, and they can set fees that make it expensive to move to another provider. Cloud may not be a money saver for a business that could be looking to a dynamic environment. The cost actor is driving the businesses to keep their data in-house or in colocation to keep them tighter possession of the data. Many of the businesses have realized that cloud can be solutions if you look for intensive applications that need data dynamics, however with an added cost that affects lot more dollars to do that vs. doing something on-premise on your own completely.

Storage platforms have seen a new rising trend for the enterprises for the CIOs, making the cloud vs. Private decision for applications based on the lifespan of the applications. Businesses are confused when it comes to deciding how much of the resources they need to throw at a task, with cloud making more sense for short term applications. Companies are utilizing the intense cycle of resources for the company controlled facilities when the application has a lifecycle of just three to five years along with hardware refresh cycle; it will last for entire lifecycle fo the application, where both data and hardware can be retired at the same time. Data solutions have become intelligent with use of private data center vs. the cloud because for most of the businesses they have to constantly use different technology factors that include a large amount of business sensitive by applying different solutions on the complete data.


Another factor that many enterprises are finding attractive as the colocation providers can act as a pipeline between the enterprises and multiple cloud providers. So rather than directly connecting to AWS, Azure, etc., businesses can connect to a colocation where the colocation will acting like a complete switch connecting the cloud providers through dedicated and high-speed networks. When a business decides to have complete infrastructure within the company infrastructure where either the corporate data center is within the Corporate headquarters or someplace remote where land would be cheap, that means we would facing network connectivity as an issue. Where data center colocation providers add larger footprints that come in since they have points of presence in the larger cities.

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