The Price Tag for Colocation

Your data center strategy might not involve building or retrofitting a stand-alone facility or floor of an office building.

Stashing your servers and racks in a closet might be closer to what your data center looks like.

Any of these scenarios are considered part of your capital expenditure, and most likely, the brunt of your IT budget. How is the cost of colocation any different? Does it really save you money?

The cost model for colocation is much simpler than managing your own data center, whether it’s a building or a closet. Pricing models for colocation are a combination of real estate, telecom, power and labor. These costs are considered part of operational expenditure and are much less than designing, building and maintaining your own facility.  Let’s take a deeper look.

Move-In Costs

Moving to colocation data center requires a few one-time costs to get you up and running. Typically, set-up costs are equal to one month’s rent if you require customization or a full suite.

For smaller configurations, there are only one-time fees for installation of the rack(s), power and cross connects. Here are some typical price ranges for installation.

• Rack installation fees are a few hundred dollars per rack
• Power installation fees can range from one thousand to a few thousand dollars
• Cross connect fees can range from a few hundred to a few thousand dollars, depending on speed and drops.

Monthly Lease Payments

The monthly recurring fees for colocation can vary widely depending on your environment and the resiliency (Tier level) of the facility. Since power is really the driving cost in the market, there are few ways data centers can charge.

• Flat per-whip charge – a fixed rate to supply power to the rack
• Metered power consumption – pay for what is used
• Square footage pricing – flat rate for floor space and estimated power consumption

Additional Charges

Network Cross Connects – Redundant connectivity to multiple carriers provides cost-effective options via a monthly fee for fiber and copper cross connects.

Hands and Feet – Data centers charge industry-standard hourly rates for managed services options. Typically, simple services such as server reboots and tape rotations are complimentary.

Is Colocation the Best Data Center Strategy?

Numerous online resources exist to determine if building or retrofitting a data center versus colocation is right for you. Companies can expect several benefits from either scenario. In most cases, leasing data center space is going to outweigh benefits from building/retrofitting. Let us explain.

Predictable Costs – Colocation facilities provide services for a monthly fee, which are operational costs spread over many years instead of a large expenditure upfront. Your terms are negotiated at the onset with no surprises over the life of the contract. Running your own facility may result in unforeseen maintenance costs and result in a surge of costs during equipment refreshes.

On-Demand Capacity and Scalability – The process of bringing on additional capacity within a colocation data center is faster, cheaper and ready to activate at a moment’s notice.

Better Access to Space and Power – Third-party data centers manage and operate data centers as their core business. This provides access to enhanced purchasing power with more competitive rates on space, utility rates, power and cooling infrastructure.*

Expert Management – Colocation providers are experienced and highly skilled at operating data centers. You benefit from this core focus and expertise, which you may not have on staff. It also provides you with optional managed services including monitoring and remote hands and access to other IT services partners.

Benefits of Building

Companies requiring more control over their data center environment will have the internal staff and resources to maintain and operate all aspects of the facility. Building your own data center provides control over every aspect from visitor access and maintenance activities to power and cooling efficiencies. You reduce your risk of losing a lease and can access existing space already owned by your company.

Key Issues in Lease vs. Build

*Build or Buy? The Economics of Data Center Facilities (Forrester)

To Expand or Colocate…That is the {Data Center} Question

Whether it’s data growth, virtualization or consolidation…chances are your data center is probably reaching its space, power or cooling capacity. Information is exploding. IT is looking for facilities to support extreme densities and consolidate small data centers. The question is…expand current facilities or look to colocation?

With Big Data on the list of initiatives for 2013 (up 24% according to State of CIO Survey), the explosion of data growth is sure to make an impact on the data center.

Forrester predicts that ongoing data growth will outperform Moore’s Law over the next few years. The massive growth of digital data and the challenges around how to secure, manage and store that data is only increasing.

The decision to consolidate, move and/or expand your data center is serious business, as it will likely be your largest infrastructure investment.

What many don’t take into account are the costs associated with building, operating and maintaining a fault tolerant data center.

Forrester says to evaluate three key elements in the build vs. buy (colocation) scenario. Over the next couple weeks, we’ll take a deep dive into each of these economic factors.

• Benefits – How will you benefit from colocation versus owning your data center?
• Costs – What are the hard and soft costs associated with leasing vs. owning?
• Risks – How will you determine your acceptable risk and redundancy requirements?

Nice Rack! How Space Planning Affects Your Colo Bill

Floor space planning is a critical part of any colocation project. When considering colocation, companies will work with their data center provider to determine the optimum rack layout based on density, phasing and availability required. This is one the first steps in colocation planning. Let us dig deeper.

Many users do not understand how critical the floor layout is to the performance of a data center. The floor plan strongly affects the following characteristics (and your monthly colo bill):

• The number of rack locations that are possible in the room
• The achievable power density
• The complexity of the power and cooling distribution systems
• The electrical power consumption of the data center

Number of Rack Locations

Ideally, you want to maximize the number of rack locations on the data center floor. Careful consideration must be applied when designing the floor plan including:

• Hot/cold aisle design
• Location of air conditioners and power distribution units
• Location of walls and stairs
• High power density environments

This is a key element for colocation customers, as the monthly bill is tied to the amount of occupied square footage.

Power Density

Colocation providers establish zones of different power densities within the data center, which are determined by equipment layout. The floor plan becomes a key element to regulate density. A poor layout can create hot spots and reduce data center efficiencies.

Power and Cooling Distribution Systems

The data center floor plan can significantly impact the power and cooling systems. Specific arrangement of racks increases efficiencies and ensures proper airflow and power pull.

Electrical Power Consumption

The power and cooling systems are closely tied together. An inefficient floor plan up-regulates the cooling systems to maintain temperature and dehumidify the air, which increases electrical power consumption and your power bill.

It is important to consider these elements when sourcing colocation providers. Many will work with you to determine the best space plan for your environment in order to meet efficiencies and budget requirements.

Our Colocation Checklist provides a starting place for evaluating providers. Download here.

*Source APC Data Center Projects: Establishing a Floor Plan

A Data Center Holiday Poem + 3 Gifts

Happy Holidays!

‘Twas the night before Christmas, when all through the NOC
All the servers were stirring, on the floor and in the POP
The data was secure on the networks with care,
In certainty that downtime would never come near;
Customers were home, relaxing in the hour,
That their servers and cabinets remained cool at full power;
And FIBERTOWN Data Centers would not take a nap,
To ensure that its network was available on a snap—
So celebrate this holiday with those that matter,
and we’ll see you next year, all a little fatter.

	Data Center Downtime (Infographic) Our latest infographic illustrates the impact of data center downtime and how it affects the bottom line. Download Now.
	Avoid Data Center Downtime (eBook) Dual-powered data centers have increased IT reliability by ensuring power distribution and delivery. Improper implementation can negate or diminish the effectiveness of dual power designs. To eliminate downtime, avoid these four design failures that can lead to interruption. Download Now.
	Evaluating Colocation (Checklist) Considering colocation as an option to reduce costs associated with powering a data center or increase scalability and eliminate downtime? Get started with this checklist. Download Now.

Striving to be the Best {Data Centers} in Texas

“Three essentials of success: Know what you’re doing. Love what you’re doing. Believe in what you’re doing.” – Steve Musseau

This has been an exciting quarter for FIBERTOWN. We recently won two distinguished awards from the tech industry and our community.

We are excited to announce that Inc. Magazine included FIBERTOWN on the Inc 5000 this year. To top that, we were recognized as one of the top 100 fastest growing companies in Texas. This is our first year on the list after having achieved 277% growth over the past three years.

We expanded operations in 2011 with a new 50,000 SF Houston data center built north of downtown.

The Greenspoint District was an obvious choice for us to open a new Houston data center. The robust fiber backbone and access to diversified city power and infrastructure allow us to provide redundant and highly available power and network connections.

Our commitment to supporting local and growing together earned us “Small Business of the Year” by Houston Intercontinental Chamber of Commerce and Greenspoint District.

We greatly appreciate this accolade as it represents our vision to be the best local, expert data center team you recognize and can count on.