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Using colocation data centers: Here's what you need to know

From simplifying your budget to making the most of IoT, colocation can be the smart choice for your data center needs.

There is very little that can be considered inexpensive about building and running data centers. From the capital expenditure required to build a data center to the ongoing operational expenses needed to manage and maintain one, the one guarantee you have is that data centers are expensive.

Another guarantee is that whatever technologies you adopt today will likely be obsolete in a fairly short period of time. This is especially true when you are looking at "green" data center technologies, which are being developed constantly.

Add to this the fact that data center operations are a specialty unto themselves: While most companies have come to grips with their IT operations, a data center in most ways remains a facilities problem, and the delivery of a structure that meets the needs of an ever-changing IT workload remains a complex and expensive undertaking.

Why use colocation specialists

Enter data center colocation specialists, service providers whose business is data center facilities design and operation. Their business is to offer the most cost-effective data center solutions to their customers. If they had a mantra it would be, "Our business is data centers so yours doesn’t have to be."

In these days of on-demand services, contracting for space at a colocation facility may seem like a step backward. But keep in mind that these facilities offer several tiers of service, from a portion of a rack to entire data halls, and in many cases, the process for adding space is as simple as contacting your provider and asking for it. The same flexibility is applied to other aspects of the data center. Need additional power, bandwidth, or cloud services? Depending upon your choice of provider, adding or removing these options is as easy as using a self-service portal.

The obvious benefit of using a colocation center is that it allows you to focus on running your business while the colocation provider focuses on running your data center. This minimizes the need to build expertise in data center construction and operations, which can be costly and time-consuming. Budgeting becomes simplified too, because your costs are more contained when using a colocation provider. You’ll have a fixed contract fee for the use of the data center, and given that data center pricing models have evolved in recent years, even your variable costs—such as power consumption—will become more predictable. More colocation providers are now passing on direct consumption costs rather than using a cost-plus model, where customers are charged an automatic markup based on estimates of their power use. Service-level agreements allow colocation customers to get contractual guarantees on power availability, network bandwidth, redundancy, continuity, and almost any capability for which they are willing to pay.

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Even building complex hybrid environments using private and public clouds can be simplified, with many major colocation vendors now offering direct connectivity to cloud services such as Microsoft Azure and Amazon Web Services. This can improve performance and minimize connectivity bandwidth costs. Deploying redundant services, business continuity solutions, and distributed backup and disaster recovery solutions can also be made easier, as the big colocation companies have multiple sites and will often offer discounted connectivity services between those sites.

And in these days of cutting-edge data centers driven by DevOps, hyperconvergence, and composable infrastructure deployments, using a colocation facility allows businesses to focus on those technologies rather than the building that houses them. With such technologies looking at code or portal management of resources and services, location has little meaning to the user. And using a colocation facility could make these advances more suitable for smaller enterprises. In short, the resources that would go into building and maintaining your own data center could be put to better use investing in the cutting-edge hardware needed to build the infrastructure that provides the greatest business agility.

Economies of scale

In the economy of the data center, bigger is almost always better. That's why colocation businesses are building large-scale data center facilities that can be operated more efficiently than smaller ones. They can be more environmentally friendly too, offering the very latest in energy management and cooling efficiency. These benefits are passed on to customers in the form of reduced operational costs and the ability to boast that their data centers are green.

But colocation facilities aren't always giant buildings hosting multiple customers. Quite often they are smaller data centers that either serve areas that would otherwise have to rely on a more geographically distant facility or provide services to local small businesses that would otherwise need to invest in their own infrastructure. In some cases, a network of regional data centers is able to deliver less expensive connectivity options, giving large-scale customers the ability to deliver services on the local level.

For companies that own their own data centers and consolidate them into newer, more efficient facilities, colocation is often a better option. It’s not unusual to walk into data halls that once housed dozens of rows of server racks to find them almost empty, with the work that required all of those servers now being performed by a quarter of that number, still drawing the same amount of power in their higher density deployment. That leaves the company to pay the facilities fees on a space that's too big for its reduced need.

Making the most of IoT

With the number Internet-connected sensors, appliances, and other smart devices that make up the Internet of Things (IoT) expected to number nearly 21 billion worldwide by 2020, up from 4.9 billion today, according to research by Gartner, it's important to consider the impact of IoT on the future of the data center.

The amount of data being generated and the bandwidth necessary to transport it all could transform the economics of data management. Being able to deliver content to devices and gather data in return will likely require some sort of hierarchical structure that aggregates local data before passing only the necessary components upstream to a central data center or a dedicated storage facility. Having content available locally will also reduce the costs associated with the delivery of that data, a business model on which most content delivery networks are already built.

Edge data centers are in the best position to handle the tremendous amounts of data that IoT is expected to generate. With a hierarchical infrastructure, that might begin with a distributed network of micro data center technologies as the first stop. The regional colocation provider would be able to offer the data center services necessary to aggregate data prior to moving it upstream. Even large enterprises with a significant investment in their own data centers would likely find it most cost effective and efficient to build this hierarchical infrastructure using colocation providers in appropriate regions. Deploying their own technologies closer to the consumption of content and generation of data would give more detailed control over the costs associated with handling that data.

Why colocate?

Proper utilization of colocation data centers is determined by the customer's requirements. For the ultra-security-conscious, colocation providers can offer just a blank slate, providing power and connectivity options that can then be filled in and directly controlled by the customer, with the provider having no access to the customer's leased space. On the other hand, for a customer that prefers to take a hands-off approach to the day-to-day running of its data center, the colocation facility can service and maintain the customer’s equipment in a leased space.

In fact, there can be pretty much any level of hand-holding necessary, as contractually offered by the provider. It’s up to the customer to decide how the colocation space will be used. By comparing the capital expenditures that go into an owned facility with the operating expenditures required to lease space in a colocation facility, the customer can determine the approach that best fits its budget and needs.

Using colocation data centers: Lessons for leaders

  • Colocation providers can offer enterprises a more flexible infrastructure than they would have if they built their own dedicated data center.
  • Colocation facilities aren't always giant buildings hosting multiple customers. Quite often they are smaller data centers serving areas that would otherwise have to rely on a more geographically distant facility, or local small businesses that would have to build their own.
  • Given the expected growth of IoT, businesses will likely find it cost effective and efficient to build a hierarchical infrastructure for data, using colocation providers in appropriate regions.

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.