Today’s businesses are faced with the decision whether to invest in their own data centers or utilize colocation/cloud options to support their IT server/data storage requirements. This is especially true for small to medium sized companies with ever increasing data storage needs that are starting to have a real impact on the company’s short-term and long-term strategic planning. While server growth has actually slowed as a result of virtualization, storage continues to grow between 20% and 150% annually depending upon their business sector.
IT infrastructure has transformed over the past decade to become the key infrastructure element for the majority of businesses today and as such it is often viewed as the single most critical element often above human capital. Business continuity through smooth and planned expansion of existing server & data storage/mgmt capabilities as well as disaster recovery (DR) is one of the hottest topics in today’s corporate environment. The continued growth on IT infrastructure places restrictions on a company’s capability to grow, service clients, and meet company goals. In Boston, we often see the decision on colocation versus growth/expansion of existing data centers for businesses to be one of the primary project issues as companies consider relocating/growing their offices. This is because the property may have limited infrastructure to support the data center loads and/or insufficient levels of redundancy and reliability to fulfill the tenant’s requirements. These issues and associated lease negotiations, and cost/schedule constraints are faced by all companies.
So what is colocation? Colocation is when the company’s servers/primary data storage, and key IT equipment are located (colocated) in a facility that is owned/operated by a 3rd party. These facilities are equipped with redundant, high-speed data connections to allow users to access application and data with similar experience (low latency) as if the IT equipment were located in the company’s offices. Additionally, supporting infrastructure for the IT equipment is often redundant and robust through cooling, power (UPS, standby, and normal), fire suppression, security, and on-site support and monitoring for full-time, dedicated staff therefore reducing the operational risk to the client (business owner). Lastly, many colo facilities today are focused on reducing their environmental impact by employing high-efficient cooling systems and very efficient power distribution systems which can be much more efficient than company-by-company approach due the economies of scale and the colo’s focus on reducing their specific operational costs.
Each business is unique and as such the evaluation of whether colocation is an appropriate path forward, a company will depend upon specific variables that need to be determined, vetted, and analyzed. A strong understanding of the company’s current data center operations (power draw, cooling, forecasted growth, and whether a disaster recovery plan is in place) are key. Forecasting out the growth of the IT’s infrastructure and associated power and cooling can often identify constraints within a company’s current owned/leased building. Examples include insufficient cooling water for client’s data center air conditioners as well as insufficient UPS and/or generator capacity to ensure continuous operations.
As part of the buy-versus-build analysis, potential colo providers will need to be provided with a clear understanding of the company’s power (kW), space, operational reliability, bandwidth requirements, and contract length/terms. Considerations for the the evaluation include understanding how power is billed (allocated or actual use?), escalation cost per year, data bandwidth billing, tech support costs and availability, as well as expansion / retraction rate/penalties. If the business has regulation compliance requirements (i.e. SSAE-16 or HIPAA), these will be a litmus test for potential colo facilities. Additionally, the physical location of the colo facility is often a key variable for the decision process. Many clients want to be able to get access to the colo facility within 5-30 minutes.
By extraditing the majority of a company’s IT infrastructure outside of the business managed space, the operational reliability is often increased while also freeing up current and future space for the company’s core business functions. Business & Risk Management 101…. Joy.
Chad A. Wisler, PE LEED AP BD+C is managing principal at Vanderweil Engineers, LLP in Boston.