Data centers are information system infrastructures that collect, manage, and process data and information. Many businesses have their own facility and equipment. They have a proper way of managing and processing data from different sources. Managing information is part of every business system nowadays. But when an entity does not have its own data center facility, then it is advised that it can get one from a partner, also known as a colocation data center.
Renting an information network facility, physical office space, or Internet bandwidth from an existing service provider is the main essence of data center colocation (colos). The service provider grants the utilization of data center resources for deployment and hosting. They are shared towards the external customers or outlet organizations.
According to this news, there was an estimation of approximately USD 31 billion as the data center colocation market value in 2017. And it is expected to grow up to USD 105 billion by the year 2026. Between 2018 and 2026, the expected growth rate is expected at around 14.2%.
What Does Data Center Colocation Usually Do?
A data center service provider usually provides the building space, together with the other important elements such as power, cooling system, physical security, and bandwidth. Furthermore, a colos client has to provide storage and server equipment. There are as well service providers that extend more offers such as management system that helps business-related activities and initiatives.
Choosing colos is considered as an ideal, effective solution by some business entities. However, there are also disadvantages when doing so. The very first disadvantage is the distance that can lead to a higher transportation cost for the business entity that pays for the services. This cost is usually spent when it is needed to travel so that the equipment has to be figured out manually. When the colo clients have nothing to do because of the lock-in contract being signed, it can happen.
Furthermore, there can be a provision of the contract that can prohibit the colo customers to re-negotiate the rental rates, especially when prices fall. But don’t worry because there is a safety net that can be done. It is significant that the business organization will read and understand the service level agreements (SLAs) being agreed upon. This is to avoid hidden charges that can possibly be imposed.
Why Choose Colos?
If there are disadvantages, of course, there are also advantages.
- Less hassle because you don’t need to buy equipment and computer resources.
You don’t need to buy the facilities and equipment that are part of the agreed assets that the customers can use. In this regard, it can be a clear advantage because in terms of the maintenance cost, it might be covered as well in the signed agreement/contract. Basically, it is a cost-efficient approach to rent data centers. Infrastructure investment is costly, so to speak. But a particular renter can realize the savings by way of sharing costs with other parties also colocating the same service provider. If a start-up business can’t afford on its own, then it is sound decision to pay for a data center service provider.
- 24/7 security and IT support are awesome and it has led to why colos are popular today.
It is a normal thing to know that entities and organizations really want to know that their business data and information are tightly and securely guarded. One good thing with colos reflects on this aspect. 24/7 monitoring and processing of data is ensured. Up-to-the-minute protocols are even employed for both cyber security and physical infrastructure. It is significant to understand that colocation data centers are ideally located in a strategic distance. So, the risks associated with this are lessened.
- It is a way to minimize the bad effects of downtimes to businesses.
Minimizing downtimes is one of the best impacts when paying for colocation data facility providers. Colos have generators and other alternative energy sources. It is important to note that a single outage can cost a business entity a lot of money. For example in 2018, an hour outage during Amazon Prime Day had caused Amazon to lose sales up to $100 million. This is a lot of money to think of, most especially for start-ups.
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