For some, outsourcing your data center is like sending a child off to college.

It’s sometimes hard to let go and trust that they are in good hands. You know the experience they’re receiving allows them to run at peak performance, but it can be difficult not seeing them every day. You worry that they may not be safe so far away from home. Added to that…it can sometimes get expensive, until you realize the return on investment is invaluable.

When it comes to your data (or business children) and mission critical IT assets, how do you justify colocation and what’s the ROI?

At first, taking the data center out of your own building and moving it somewhere that could charge you thousands of dollars per month for the next 3-5 years seems complicated and expensive. Upon further investigation though, IT leaders find that reliability, performance and security are worth the consideration.

According to Colocation Industry Trends Report, here’s how IT leaders benefit from colocation:

Reliability & Performance

When running your own data center, you may not be responsible for the electric bill – it just goes to accounts payable and magically disappears.  You may not be aware of the thousands of dollars it takes to keep the data center running at 68 degrees. You may not realize the cost of electricity it takes to power all the new cool blade servers you just bought or that new SAN that you just had to have to store all the valuable data the company needs to run daily operations.

What would you do if you lost power to your SAN and the geologists, bankers, doctors or executives couldn’t access it? How would you answer when the IT manager, CIO or even CEO demands, “Why are we down and how long until systems are back up?” What would downtime cost your business in terms of lost revenue and customer service reputation?

Colocation providers specialize in providing uninterruptable power, high-performance cooling and redundant bandwidth. As a colo customer, you can sleep at night assured your service agreement guarantees uptime and performance so you never have to answer to your executives. How much is that worth?


Third party data center operators watch over customer IT assets as if they were their own. Most providers offer 24×7 security offices with video surveillance, fire and flooding protection, and network monitoring to ensure customer equipment is safely tucked away and running at peak performance. Tier IV data centers guarantee security, reliability and performance. What’s better than a 100% SLA for justifying ROI?

Disaster recovery and business continuity are one of the key elements of colocation. Securing production systems or failover at an offsite location guarantees the continuance of business in the event of disaster.

When it comes to bottom line ROI, some customers see returns in as little as six months. Immediate ROI comes from eliminating the CAPEX of installing and managing hardware in-house. Long term returns come from reducing power and cooling costs, eliminating downtime, ensuring disaster recovery, delivering high-performance bandwidth to users and customers. Most companies should prepare to see a significant improvement in up to 24 months.

Whether you outsource your data center within 10 miles or 100 miles, colocation doesn’t have to be an empty nest experience. It’s the next step in allowing your children (or data) to scale as your business grows with confidence it’s being cared for and operating at optimal performance.

One comment

  1. This article could not be more wrong. The OPEX cost extrapolated out over time (5-10) years far outweighs the CAPEX outlay of building and operating a data center. Additionally, there is not any incentive for a colo to achieve better PUE and pass the cost to the customers. Colo PUE is a marketing tool only. Yes, we run owned and operated data centers and we outsource to colo providers. The comparison has been made long ago…if you have the will to build, and hire good, solid, loyal people to sustain your sites, then the cost to own and operate is the best path for your company to follow.

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