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.