Tuesday, August 16, 2016

Understanding the Business Benefits of Colocation

Digital transformation and the move towards private cloud is really shaking up the design and implementation of data centers. As companies start their journey to the cloud, they realize that having sets of dedicated servers for each application will not help them and they need to change their data centers.

Historically, companies started out with a small server room to host a few servers that run their business applications. The server room was located in their office space and it was a small set up. As business became more compute centric, the small server room became unviable. This led to data centers - which was often located in their office.

The office buildings were not designed for hosting data centers and had to be modified to get more air-conditioning, networking and power into the data center. The limitation of existing buildings created limitation on efficient cooling and power management.

But now when companies are planning to move to private cloud, they are now seeing huge benefits of having a dedicated data center - a purpose built facility for hosting large number of computers, switches, storage and power systems. These purpose built data centers are built with better power supply solutions, better & more efficient liquid cooling solutions and more importantly offer a wide range of networking connectivity and network services.

As a result these dedicated data centers can save money on IT operations and also provide greater reliability & resilience.

But not all companies need a large data center which can benefit from economies of scale. Very few large enterprises really have a need for such large dedicated purpose built data centers. So there is a new solution - Colocation of Data Centers.

For CIOs colocation provides the perfect win-win scenario, providing cost savings and delivering state-of-the-art infrastructure. When comparing the capabilities of a standard server room to a colocated data center solution, often times, the benefit from power bills alone is enough to justify the project.

These dedicated data centers are built on large scale in Industrial zones with dedicated power lines and backup power systems - that the power cost will be much lower than before. Moreover, these dedicated data centers can employ newer & more efficient cooling systems that reduces the over all power consumption of the data center.

Business Benefits of Colocation

Apart from reductions in operational expenditure, there are several other benefits from colocation. Having a dedicated team where people are available 24/7/365 to monitor and manage the IT infrastructure is a huge benefit.


  1. Cost Savings on Power & Taxes

    Dedicated data centers are built in locations that offer cheap power. Companies can also negotiate the tax breaks for building in remote or industrial areas. In addition to a lower price of power, the data centers are designed to include diverse power feeds and efficient distribution paths. These data centers are dual generator systems that can be refueled while in operation as well as on-site fuel reserves, and have multiple UPS support in place.

    In addition to power costs, dedicated data centers will have engineers and technicians who will monitor the power levels, battery levels 24/7 so that the center has 100% uptime.

    Additionally, data centers have the time, resources and impetus to continually invest in and research green technologies. This means that businesses can reduce their carbon footprint at their office locations and benefit from continual efficiency saving research. Companies that move their servers from in-house server rooms typically save 90 percent on their own carbon emissions.

  2. Network Connected Globally, Securely and QuicklyToday, high speed network connectivity is the key to business. And it is lot more difficult to get big fat pipes of network connectivity into central office locations. It is lot more easier to get network connectivity to a centralized data center. A dedicated data center will have many network service providers providing connectivity and often at a lower price than at a office location.

    Dedicated data centers also provide resilient connectivity at a fairly low price – delivering 100 Mbps of bandwidth might be hard at an office location and trying to create a redundant solution is often financially unviable. Data centers are connected to multiple transit providers and also have large bandwidth pipes meaning that businesses often benefit from a better service for less cost.

    Colocation enables organizations to benefit from faster networking and cheaper network connections.

  3. Monitoring IT InfrastructureBuilding a dedicated data center makes it easier to monitor the health of IT infrastructure. The economies of scale that comes from colocation helps to build a robust IT Infrastructure monitoring solution that can monitor the entire IT infrastructure and ensure SLAs are being met.

  4. Better SecurityA dedicated data center and colocation will have better physical security than a data center in a office location. The physical isolation of the data center enables the service provider to provide better security measures that include biometric scanners, closed circuit cameras, on-site security, coded access, alarm systems, ISO 27001 accredited processes, onsite security teams and more. With colocation, all these service costs are shared - thus bringing down the costs while improving the level of security.

  5. ScalabilityPlatform 3 paradigms such as digital transformation, IoT, Big Data, etc are driving up the scale of IT infrastructure. As the demand for computing shoots up with time, the data center must be able to cope up with it. With colocation, the scale up requirements can be negotiated ahead of time and with just one call to the colocation provider and scale of the IT  infrastructure can be increased as needed.

    Data centers and colocation providers have the ability to have businesses up and running within hours, as well as provide the flexibility to grow alongside your organization. Colocation space, power, bandwidth and connection speeds can all be increased when required.

    The complexity of rack space management, power  management etc is outsourced to the colocation service provider.

  6. Environment friendly & Green ITA large scale data center has more incentives to run a greener IT operations as it results in lower energy costs. Often times these data centers are located in Industrial areas where better cooling technologies can be safely deployed - which makes it possible to improve the over all operational efficiency. Typically, a colocated data center often adhere to global green standards such as ASHRAE 90.1-2013, ASHRAE 62.1, LEED certifications etc.

    A bigger data centers enable better IT ewaste management and recycling. Old computers, UPS Batteries and other equipment can be safely & securely disposed.

  7. Additional Services from Colocational PartnersColocational service providers may also host other cloud services such as:

    a. Elastic salability to ramp up IT resources when there is seasonal demand and scale down when demand falls.

    b. Data Backups and Data Archiving to tapes and storing it in secure location

    c. Disaster Recovery in a multiple data centers & Data Redundancy to protect from data loss incase of natural disasters.

    d. Network Security and Monitoring against malicious network attacks - this is usually in form of a "Critical Incident Center." Critical Incident centers are like Network Operation Center - but monitors the data security and active network security. 
Closing Thoughts

In conclusion, a dedicated data center offers tremendous cost advantages. But if the company's IT scale does not warrant a dedicated data center, then the best option is to move to a colocated data center. Colocation providers are able to meet business requirements at a lower cost than if the service was kept in-house.

A colocation solution provides companies with a variety of opportunities, with exceptional SLAs and having data secured off-site, providing organizations with added levels of risk management and the chance to invest in better equipment and state-of-the-art servers.      

1 comment:

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