Colocation - keeping a lid on costs

Written by Phil Alsop, Editor, DCS Europe Published 2023-09-22 09:52:53

Building your own data centre can be a whole lot more expensive thanks to global (materials and people) supply chain pressures. And then there’s the ongoing operating costs to consider, not least the current cost of power. Why not let a colocation provider take the strain?

There are any number of challenges when it comes to data centre construction, ownership and operation. Increasingly, any advantages associated with taking the in-house route are far outweighed by the many benefits of accessing a colocation data centre.

Want to build a data centre?

First, there’s the hassle and considerable cost of identifying and purchasing some land – land which is in a suitable location, with good access to utility services, including the possibility (and expense) of dual power feeds.

Then there’s the construction of the data centre building, and the installation of the internal M&E infrastructure. More capital investment, a whole world of pain managing multiple contractors to ensure that the work is carried out on time, to the correct standard and to budget. Always assuming you can locate the necessary, skilled workforce at a time when such personnel are in short supply and high demand.

Once built, there’s almost certainly a great deal of empty, or at least, unproductive space, just waiting until such time as it’s required for house servers, storage boxes and network devices. You will be paying for this empty space for quite some time.

As for the operation and maintenance. Well, data centres can be temperamental things, so they need a great deal of TLC. Providing such care and attention is a significant cost. As is ensuring that the infrastructure remains at peak operational performance. And then there’s the constantly changing workload which may well require some kind of data centre reconfiguration. And then your power bill drops through the letter box…

Maybe you are lucky enough to already own a data centre. If it’s brand new, and you have a perfect, flexible environment, the perfect number and blend of operational skills required, and have the deep pockets required to pay all the running costs of your dedicated, fully-used space, then you are in that rare and lucky position of just maybe not needing to consider any change in your approach to data centre usage.

More likely, you’ll own a somewhat ageing, inefficient data centre, which needs extra large helpings of TLC and money to keep it running, to upgrade it, to try and keep it fit for purpose. And maybe you have a couple of skilled individuals who know what’s going on, but they are not far off retiring and it’s not obvious how or where you’ll find their replacements. And the NOC (Network Operations Cetnre) receives an increasing quantity of alert and alarm messages, all of which need to be dealt with in a timely fashion. And then your power bill drops through the letter box…

Additionally, if you own your own data centre, the environmental performance of this asset is almost certainly getting more and more attention from the board, your shareholders and other interested stakeholders. Planting a few trees to offset your carbon footprint might have worked in the past, but not anymore. Now, you will need to be able to demonstrate very real progress towards sustainability, if not Net Zero itself, within your facility. 

The good news? When the power bill arrives, it should be lower if you’ve carried out the necessary energy-efficiency measures. The bad news? These measures can be expensive to implement and it’s not a one-off exercise, but constant environmental monitoring and improvement of your data centre. A big responsibility.

Indeed, the building, owning and operation of a data centre facility is a huge responsibility. And one that an increasing number of organisations are choosing to hand over to expert organisations. 

Plenty of organisations are moving straight from on-premise data centre and IT resources straight into the cloud. After all, there are many benefits with accessing the IT resources you need just as you do your other utility services. Being able to use what you want, how and where you want, and all for a fixed monthly fee – sounds perfect.

Ah, but look under the covers and that fixed monthly fee is maybe not so fixed or as low as you had imagined. Increasingly, companies that rushed headlong into the cloud are pulling back, once the true costs are understood. That’s not to say that they are abandoning the cloud, more working out which applications work well in the cloud and which don’t.

And so we arrive at the hybrid infrastructure model. A mixture of on-premises, cloud and, last but by no means least, the colocation data centre. Or what we might call the hybrid, hybrid infrastructure option – the perfect blend of the best attributes of the on-premises and the cloud options. That’s to say, the IT infrastructure – the important bit if you like as far as your organisation is concerned, where the real value add is obtained – remains in your possession, but you place it in a colocation data centre. The major benefits of doing this include the fact that you are leaving the data centre infrastructure to the experts; you can take as much or as little space as you need, and adjust this capacity whenever you want; the cost of accessing the colocation data centre infrastructure will be far less than owning and operating it yourself; this cost will be OPEX and not CAPEX intensive; you can have access to many locations which you simply couldn’t afford otherwise; and many more connectivity options and other services than in-house; and it’s a near certainty that you’ll be paying less for your colocation power than your own data centre power – those providers are rather good at purchasing energy supplies a long way in advance as well as ‘in bulk’, so their customers can benefit from this good housekeeping.

Colocation also offers you the cloud-like attributes of a dynamic, scalable, flexible and fast to market data centre infrastructure on which to run those applications which you want to continue to own and operate yourself. And a subscription model, so you pay monthly, not upfront. And you know that you are benefitting from some degree of economy of scale – as with the cloud, colocation providers are doing a similar job for many customers, so they can ameliorate their costs across all of these. Everyone benefits financially.

In summary, when it comes to the cost of running your IT infrastructure, the colocation option almost certainly gives you the best price/performance/control ratio of any. It would be foolish to pretend that end users should abandon all their in-house assets along with all of their cloud and managed services. Nevertheless, the in-house data centre/IT infrastructure option gets less and less attractive as your digital transformation plans develop. Cloud and managed services offer some fantastic benefits – with the proviso that you really need to understand the true cost of replacing your in-house resources with these outsourcing options. 

Colocation might just be the Goldilocks solution around which to base your overall hybrid IT infrastructure strategy. It can do the lion’s share (or should that be the bear’s share?!) of the heavy lifting cost-effectively and sustainably – colocation providers are way ahead of the curve when it comes to the IT industry’s journey to NetZero. And you can then complement your hybrid-based approach with any in-house infrastructure or cloud and managed services which offers some combination of price, performance and control that makes more sense for certain applications.

Colocation really can help you keep a lid on your IT costs.