Grow with Data Center Colocation Services

For most companies, licensing space from a data center colocation service provider is almost always a better business and technical decision. The exploding demands placed on IT infrastructure and the high operating cost make it difficult for in-house data centers to keep pace. Only the largest tech companies routinely opt for building their own facilities. So unless you’re a Google-type company, data center colocation is a lot quicker and less expensive solution than building your own data center.

How to Evaluate Data Center Options

Because so many factors are involved, the decision of whether to build or license data center space from a service provider involves a complex analysis that vary among companies.

However, common issues involve these two areas:

  • Analyzing Cost – Businesses develop cost comparison models analyzing capital costs and operating expenses. Constructing an in-house data center requires large capital outlays at inception. Licensing data center colocation space involves a monthly operating expense. Therefore, the analysis looks at the total cost of ownership over the expected life of the in-house data center.

Many times, the analysis becomes complicated because costs change over time. If you conduct a cost comparison on the total cost of ownership of a newly built data center – to make the build vs. buy decision – you’re counting on those numbers remaining the same. However, that’s rarely the case.

Even if your analysis concludes your greenfield build will cost less over time compared to data center colocation, you may not be accounting for changes in the cost of capital or changes in the cost of building materials and labor throughout the project. Therefore, it’s extremely difficult to arrive at an accurate total cost of ownership figure in your initial analysis. Therefore, companies tend to focus more on the amount of cash required upfront.

  • Analyzing Risk – In addition to a cost analysis, companies look carefully at the risks involved in the data center decision. Here’s a snapshot of typical risks:
  • Expertise – Data centers are complex facilities with intricate systems for power distribution, cooling, electrical, network, security and more. For most companies, managing a data center is not their core competency. So, they must hire the required expertise to ensure a properly run facility. These IT and facilities specialists can be very expensive and hard to find.
  • Forecasting – Deciding on the right size for a data center is a major challenge. What is the expected lifespan of your data center? How much are your data requirements expected to grow over that lifespan? How will the business be impacted if you run out of space? What will it cost your company if you have to support idle resources?
  • Availability– Each business needs to decide how much downtime they can experience without detrimental effects to operations. What tier level data center will be required to deliver this level of availability? You need to decide on the appropriate trade-off between the higher cost for higher availability and the hard and soft costs incurred from unanticipated outages.
  • Obsolescence – If you build a data center to last for 10 years or more, will the technology still provide the required competitive benefits? For example, server densities continue to increase. However, increased densities often require more power and cooling. Even if you swap out servers during the life of your data center, can your power and cooling systems keep pace? In many cases, you may have to settle for using old technology or invest in major facility upgrades.

Risk will play a major role when considering data center options. It boils down to whether your company wants to shoulder these risks, or you want to shift these risks to a service provider.

Why the Scales Often Tip in Favor of Data Center Colocation

Regardless of size, more and more businesses are finding that in-house data centers provide no competitive advantage. Company-owned facilities also require using valuable resources that could be invested in more productive ways.

Here’s a summary of the major reasons companies select data center colocation services:

  • The ability to preserve capital – Building a new data center requires significant capital resources at the start of a project. Many companies decide a large capital investment can be avoided with data center colocation. A data center colocation contract involves a predictable monthly operating expense. And, unlike data center colocation service providers, many companies cannot afford to build a data center with the highest levels of availability, reliability, security and more.
  • The ability to scale – Regardless of how your business demands change over time, you can easily and quickly grow or shrink your data center space with data center colocation at the end of your contract term. If your operation is growing, there’s no need to invest in a major upgrade. You simply add more space from your service provider.
  • Unmatched expertise – Building and managing data centers is a data center colocation service provider’s core business. They live and breathe data center operations. So, they’ll be well versed in the latest technologies and processes. Plus, leveraging economies of scale allows them to be better positioned financially to invest continually in upgrades.
  • Improved efficiency – Top-tier service providers will build their facilities to accommodate new technologies. They plan for upgrades and can more readily replace outdated equipment when needed. Maintaining a technological edge results in more efficient operations. For example, the existing systems, such as power and cooling, have been built to handle new equipment with higher densities.
  • Greater availability – Few businesses can afford to offer the industry’s highest levels of availability. However, they definitely can’t afford the cost of downtime. Even an outage of a short duration can have a detrimental effect on your business. With advanced systems, processes and expertise, service providers can often provide better uptime availability through a service level agreement.
  • Enhanced physical security – Implementing sophisticated access controls, physical barriers and monitoring systems is pricey. Data center colocation service providers can make these investments and spread the cost more effectively. You gain access to advanced security features that you might not have been able to include in your own facility.

Building a data center requires specialized expertise, a major capital investment and a thorough understanding of risk mitigation. Because of these complex requirements, data center colocation has gained traction in recent years as a viable alternative to in-house operations.

FairPoint’s data centers provide organizations with network connectivity and rack or cage space in physically secure, reliable locations. Businesses can use this space as primary or secondary data center sites. In addition, data center colocation space can also be employed as an essential part of a comprehensive disaster recovery strategy. FairPoint’s data centers are strictly controlled environments with essential power, cooling, connectivity and security features – including continuous video monitoring and keycard access at ingress points.

For data center colocation services that address your remote storage, off-site IT and disaster recovery requirements, call FairPoint Data Center Services (1.866.984.4001) or visit

FairPoint Communications

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