Curious about colocation data centers? These facilities allow businesses to rent space for their own servers, offering better security, efficiency, and scalability than in-house options. This article will explain what colocation data centers are, their advantages, and how to choose the best one for your needs.
Key Takeaways
- Colocation data centers allow multiple companies to share physical space and resources, reducing costs and enabling focus on core operations.
- Key advantages include cost savings, enhanced security, and expandability, making colocation services a flexible option for firms of all sizes.
- Choosing the right colocation provider requires assessing needs, asking essential questions, and reviewing service level agreements to guarantee optimal performance.
Understanding Colocation Data Centers
Colocation data centers are revolutionizing how organizations manage their IT infrastructure.
These facilities provide an environment where multiple enterprises can lease space to house their servers and other hardware, including data center colocation options.
This shift allows companies to exit the data center business, concentrating on their core competencies while retaining control over their IT systems.
Definition of Colocation Data Centers
Colocation data centers are facilities that provide space with power, chilling, network access, and safety for hosting computing hardware and servers.
Unlike traditional data centers, where each business would need to invest in its own data center infrastructure, colocation data centers provide colocation data center facilities that allow multiple clients to share the same physical space and resources.
This model of fractional data center leasing enables firms to share expenses and resources, offering a cost-effective alternative to fully managed, on-premises solutions.
Key Components of Colocation Facilities
Colocation facilities are equipped with robust infrastructure to provide continuous operation and high reliability.
Key components include secure environments, redundant power and battery backup systems, cooling systems, and extensive connectivity options.
Cyxtera’s data centers, for example, have an electrical capacity of 250 megawatts, showcasing their power capabilities.
Providers such as CoreSite prioritize enhanced onsite security measures, including automation, AI, and integrated safety management systems, to safeguard their IT infrastructure.
Types of Colocation Options
Enterprises can choose from various colocation services based on their specific needs and budget.
The main types include shared racks, dedicated cages, and private data center suites.
Shared racks are a cost-effective solution where multiple customers share rack space in a single server rack.
Dedicated cages provide more safeguarding and isolation by allowing a single customer to occupy a specific area within the data center.
Private suites offer a fully private and personalized space, tailored to specific requirements and configurations.
These options provide companies with the agility to select the right balance of cost, assurance, and operational adaptability.
Finding Colocation Space
Did you know that finding third party data center colocation providers is a fragmented, disjointed process?
There are a few aggregator websites that help with finding colocation services, but then the process is to manually reach out to each one via filling in forms.
ENCOR’s Chief Growth Officer Jeff Howell explains the process and how there is a better way:
Benefits of Using Colocation Data Centers
Using third party data center colocation data centers can provide numerous rewards for organizations.
These facilities help avoid the capital expenses associated with building and maintaining in-house data centers while offering room to grow and pliability.
Outsourcing physical data center operations enables companies to concentrate on their core competencies and benefit from hosted infrastructure.
Cost Savings and Efficiency
Colocation data centers can significantly reduce the data center costs associated with maintaining an in-house data center.
Enterprises can eliminate expenses tied to cooling and power management, as colocation facilities handle these needs.
For example, CoreSite’s enterprise colocation services have helped healthcare providers lower expenses related to data transmission and improve system response times.
Eliminating the need to invest in in-house systems for maintenance and support allows companies to concentrate on their core operations and lower ongoing maintenance costs.
The Best Way to Save on a Colocation Agreement
Hear from Jeff on the most overlooked cost when negotiating a colocation agreement.
Enhanced Security and Compliance
Colocation facilities often include advanced security measures to protect critical equipment and data.
These measures can include fire suppression systems, biometrics, and video surveillance.
Many data center colocation companies, for instance, implement strict physical access measures to safeguard data and infrastructure.
Dedicated cages offer enhanced privacy and safeguarding compared to shared racks, making them ideal for companies with strict compliance requirements.
Thus, colocation data centers offer a secure environment (digitally and physical security), aiding enterprises in meeting regulatory standards and protecting sensitive data.
Scalability and Flexibility
Colocation data centers offer scalable and flexible solutions that can grow with your business.
These facilities provide additional space and resources, allowing businesses to expand their IT infrastructure as needed.
E-commerce companies, for example, can achieve faster load times and enhanced customer experiences through a colocation facility.
Colocation data centres enable corporations to lease space cost-effectively, supplementing existing data center facilities without significant additional investments.
Such versatility enables businesses to adapt swiftly to changing demands and scale operations efficiently.
Top Colocation Providers in 2024
Choosing the appropriate data center colocation provider can be overwhelming, given the numerous options available.
To guide you through this landscape, here are some of the best colocation services in 2024.
These providers offer robust data center services, extensive data center space, and unique features that cater to various needs.
Equinix
Equinix is a leading colocation hosting provider known for its presence around the world and extensive data center space.
Operating more than 250 data center locations across 71 metropolitan areas, Equinix offers a total of 28.1 million square feet of data center space.
Their carrier-neutral data centers provide direct connections to multiple network providers, ensuring high network connectivity and reliable managed services.
Equinix is, therefore, an ideal choice for organizations seeking enterprise colocation services
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Digital Realty
Digital Realty stands out for its commitment to sustainability, holding more certified green buildings than any other data center colocation service.
With over 34.5 million square feet of rentable space, Digital Realty offers extensive colocation options.
Sustainability is central to their operations, making Digital Realty a preferred choice for firms aiming to reduce their data center environmental footprint while benefiting from reliable data centre colocation services.
CoreSite
Founded in 2001, CoreSite operates 28 data centers across the U.S., offering over 4.7 million square feet of data center colocation space.
CoreSite is known for its extensive connectivity options, providing companies with robust colocation solutions.
CoreSite’s emphasis on high physical protection and reliable infrastructure makes it a strong contender for businesses needing secure and efficient data center colocation services.
Cyxtera Technologies
Cyxtera Technologies is a significant player in the colocation industry, operating more than 60 data centers worldwide.
With approximately 2.9 million square feet of data center colocation space, Cyxtera offers extensive colocation hosting services.
With a global footprint and robust infrastructure, Cyxtera Technologies is a reliable option for companies seeking a large-scale data center colocation service.
NTT Ltd.
NTT Ltd. focuses on ensuring high network performance and conformity with industry standards.
Operating over 200 data centers globally, NTT Ltd. emphasizes dependability and efficiency, making them a preferred choice for firms that prioritize network performance and regulatory observance.
NTT Ltd.’s stringent compliance measures and extensive data center network position them as a strong contender in the colocation market.
How to Choose the Right Colocation Provider
Selecting the a fitting colocation center is crucial for maximizing the perks of colocation hosting.
Organizations must navigate numerous providers offering a multitude of data center services and contracts.
This section will guide you through assessing your company needs, asking the right questions, and evaluating service level agreements (SLAs) to help you choose the best provider for your requirements.
Assessing Business Needs
Assessing your current and moving-forward needs is crucial when choosing a colocation facility.
Evaluate your specific operational requirements, such as dependability and efficiency, to guarantee the provider can meet them.
Server colocation services allow businesses to adjust their bandwidth and space as needed, transitioning expenses from capital expenditures to operational expenditures for more predictable budgeting.
This elasticity helps organizations adapt their IT resources in response to evolving needs.
Questions to Ask Potential Providers
When selecting a colocation service, it’s crucial to ask the right questions to understand their offerings and capabilities.
Inquire about their adherence with regulations, protective measures, and the specific data center services they offer.
Grasping these factors aids in eliminating expenses tied to power, connectivity, space, and cooling management, ensuring alignment with your business requirements.
Evaluating Service Level Agreements (SLAs)
A thorough review of SLAs is vital to certify the provider’s strengths align with your business expectations.
SLAs outline the expected service quality, including uptime guarantees and customer response times.
High consistency and uptime guarantees must be supported by adequate redundancy measures.
These agreements should also clarify the responsibilities of both the provider and the customer, detailing maintenance and support processes to provide seamless operations.
Case Studies: Successful Colocation Implementations
Real-world case studies provide valuable insights into how colocation data center providers can transform business operations.
Examining successful implementations across various industries helps companies understand the tangible advantages of colocation services.
Unfortunately due to the sensitive nature of the projects, we are never able to disclose client names, but have a 100% success rate in negotiating more favorable terms for our clients.
Healthcare Industry
In the healthcare industry, CoreSite’s data center colocation services have significantly enhanced patient care by lowering data transmission expenses and minimizing delays.
These colocation hosting services improve data access for healthcare providers, leading to enhanced application execution and stability.
As healthcare providers transition to enterprise-level infrastructures, server colocation helps manage patient data efficiently and supports the digital transformation of healthcare networks and applications.
Financial Services
Financial services have also reaped the benefits of colocation hosting through improved risk management and operational efficiency.
RACK59’s colocation solutions have maintained high reliability with minimal downtime, supporting better resource allocation and reducing disruptions.
This dependability is crucial for financial institutions managing sensitive customer and transaction data, ensuring continuous operations and enhancing overall service quality.
E-commerce
E-commerce businesses leverage colocation companies to scale operations efficiently and handle increased traffic and demand.
With access to high-performing data infrastructure, e-commerce companies can achieve rapid growth and expansion.
Colocation service providers offer low-latency connections, which are critical for quick loading times and smooth transactions.
Utilizing geographically distributed colocation data center companies enables e-commerce companies to minimize latency and enhance customer experiences, showcasing the effectiveness of colocation in managing fluctuating demand and traffic spikes, and provide secure transactions to customer data.
How do Fees Work For My Representative?
The colocation industry works in the same way as physical real estate – with brokers that represent companies in their contract negotiations.
ENCOR Advisors has represented hundreds of companies in their colocation agreements and we collect a standard success fee, paid by the respective colocation provider (your digital landlord).
Hear Jeff explain how it works:
Future Trends in Colocation Data Centers
The colocation industry is evolving rapidly, with several emerging trends shaping its future.
Recognizing these trends helps businesses stay ahead of the curve and make informed IT infrastructure decisions.
Edge Computing
Edge computing is a distributed computing paradigm that brings computation and data storage closer to the sources of data.
Edge computing decentralizes data processing, reducing latency, which is crucial for real-time analysis and action applications.
Integrating edge computing into colocation strategies allows organizations to optimize bandwidth usage and enhance overall system ahievement.
Potential use cases for edge computing in colocation include IoT applications, autonomous vehicles, and smart city infrastructure, leveraging local processing capabilities.
Green Data Centers
The shift towards green data centers signifies a trend that will shape the next generation operations of data center colocation services dramatically.
Sustainability and energy efficiency are becoming critical considerations for colocation data centers as companies prioritize green practices.
Digital Realty, for instance, has focused on sustainability by holding more certified green buildings than any other data center solutions provider.
These initiatives not only benefit the environment but also enhance a company’s reputation and reduce operational costs.
The global market for green data centers in colocation is expected to grow significantly, reflecting the rising importance of sustainable practices in the industry.
AI and Automation
Artificial intelligence (AI) and automation are transforming colocation data center operations.
AI technologies enable predictive analytics, helping colocation providers anticipate equipment failures and manage resources efficiently.
Automation technologies streamline data center operations by enabling remote monitoring and management of infrastructure.
The integration of AI and automation in colocation services allows firms to achieve higher stability, reduced operational costs, and enhanced expandability, ensuring that they can meet the demands of modern IT environments.
FAQs
What are the key factors to consider when choosing the best colocation data center for your business?
When selecting colocation data center providers, consider:
- Location and proximity to your company
- Network connectivity options and interconnected colocation data centers
- Defensive measures and certifications
- Power and cooling capacity of the colocation facility
- Modularity, bandwidth and room for growth
- Dependability and uptime guarantees
- Support services and staff expertise
- Pricing and contract malleability
- Physical measures to secure the data centre facility
- Interconnect services with other networks and cloud providers
- Overall high performance within the colocation facility, in the country and around the world
- Reputation and financial stability of the colocation data center providers
What is a colocation data center and how does it differ from a data center service provider?
A colocation data center (like Digital Realty and QTS Realty) is a facility where businesses can rent space for their servers and other computing hardware. Unlike cloud services, colocation allows companies to maintain their own servers while benefiting from the data center’s infrastructure, protection, and support all at the colocation site. This differs from managed services or dedicated data centers, where the provider owns and manages all the servers and networking equipment in the facility. Colocation data center providers offer a middle ground between building a private data center and fully outsourcing to cloud service providers.
What compliance and certification standards should I look for in a colocation data center?
Important compliance standards and certifications include:
- SOC 2 Type II for safeguarding and availability
- ISO 27001 for information security management
- PCI DSS for handling payment card data
- HIPAA for healthcare data protection
- GDPR for European data protection
- Uptime Institute certifications for data center tiers
- SSAE 18 for service organization controls
Verify the colocation provider’s certifications align with your industry requirements and data protection needs.
How do pricing models work for colocation services, and what should I watch out for?
Colocation pricing typically includes:
- Space rental (by rack, cabinet, or square footage)
- Power consumption charges
- Network bandwidth fees
- Cross-connect charges for additional connectivity
- Setup and installation fees
- Optional managed services costs
Watch out for:
- Long-term contract requirements
- Hidden fees for power overages or additional services
- Inflexible pricing models that don’t scale with your needs
- Charges for basic support or remote hands services
A good colocation provider offer transparent pricing and flexible terms to accommodate your growth.
By following these practices, organizations can be sure their data center protection measures remain effective against evolving threats.
What are the advantages of choosing a global colocation provider versus a local one?
Advantages of global providers:
- Consistent service across multiple locations
- Ability to expand into new markets easily
- Often more advanced technologies and services
- Stronger financial stability and resources
- Better support for multi-national operations
Advantages of local providers:
- Potentially more personalized service
- Better understanding of local markets and regulations
- Often more flexible and responsive to specific needs
- May offer more competitive pricing for smaller deployments
Consider your current and future geographic needs when deciding between global and local colocation providers.
What network connectivity options should I look for in a colocation data center?
The best colocation data centers offer robust network connectivity options, including:
- Multiple tier-1 internet service providers
- Direct connections to major cloud platforms (AWS, Azure, Google Cloud)
- Carrier-neutral facilities with numerous connectivity choices
- Low-latency connections to key internet exchanges
- Software-defined networking capabilities
- Support for diverse routing and redundant connections
Look for data centers that function as carrier hotels, offering a wide range of interconnection services to enhance your network speed and uptime.
What should I know about power and cooling systems in a colocation facility?
Power and cooling are essential for data center ops. Look for:
- Redundant power sources and backup generators
- High power density capabilities for modern, high-performance servers
- Efficient cooling systems with hot/cold aisle containment
- Power usage effectiveness (PUE) ratings
- Green energy initiatives and sustainability practices
- Scalable power options to accommodate growth
Verify the colocation data centre can support your current and down the road power requirements while maintaining optimal operating conditions for your equipment.
How can I assess the long-term viability and stability of a colocation provider?
To evaluate a provider’s long-term prospects:
- Research their financial stability and funding
- Review their history and track record in the industry
- Assess their market position and competitive advantages over other colocation data centres
- Look at their investment in infrastructure and technology
- Consider their partnerships with key technology vendors
- Evaluate their expansion plans and global presence
- Check for any recent mergers, acquisitions, or ownership changes
Choosing a stable and growing provider ensures continuity and ongoing improvements in services.
What interconnection options should I look for in a colocation data center?
Top colocation data centers offer robust interconnection services:
- Direct connections to major cloud providers (AWS, Azure, Google Cloud)
- Access to internet exchanges and peering points
- Software-defined networking platforms for flexible connectivity
- Ecosystem of service providers and potential business partners
- Low-latency connections between different colocation sites
- Support for hybrid and multi-cloud architectures
Strong interconnection options can enhance your network performance and provide flexibility in your IT infrastructure design.
How important is the location when choosing a colocation data center?
Physical location is crucial when selecting a colocation data center. Consider:
- Proximity to your offices for easy access
- Distance from natural disaster zones
- Network latency to key markets or customers
- Local regulations and data sovereignty laws
- Power costs and availability in the region
- Network connectivity options to major internet exchanges
A strategically located data center can reduce latency, and provide obedience with data regulations.
How do I evaluate the reliability and uptime of a colocation data center?
To assess reliability and uptime:
- Check the data center’s tier classification (Tier III or IV preferred)
- Review historical uptime performance and SLA guarantees
- Inquire about redundancy in critical systems (power, cooling, network)
- Ask about disaster recovery and business continuity plans
- Evaluate the maintenance schedules and procedures
- Consider the age and condition of the facility and its infrastructure
The best colocation providers will offer transparent uptime statistics and strong SLAs to verify your services remain available.
What support services should I expect from a colocation data center?
Leading colocation data centers typically offer:
- 24/7 on-site technical support
- Remote hands services for hardware management
- Installation and migration assistance
- Monitoring and alerting services
- Capacity planning and consultation
- Disaster recovery support
- Customer portals for real-time monitoring and management
Confirm the level of support aligns with your internal IT capabilities and company needs
How can I ensure scalability when choosing a colocation data center?
To ensure scalability:
- Assess the data center’s available space and power capacity
- Inquire about expansion plans and timelines
- Check if the facility can support high-density deployments
- Evaluate the ease of adding new equipment or expanding your footprint
- Consider the provider’s ability to offer additional services as you grow
- Look for facilities with multiple locations for geographic expansion
Find a colocation provider that can accommodate your projected growth without requiring a move to a new facility.
How do I compare the offerings of different colocation providers?
To compare colocation providers:
- Create a detailed requirements list based on your business requirements
- Request and review detailed proposals from multiple providers
- Conduct site visits to assess facilities firsthand
- Check customer references and industry reviews
- Compare SLAs and uptime guarantees
- Evaluate the financial stability and market position of each provider
- Consider the provider’s global presence and expansion plans
Look beyond just price to confirm you’re selecting a provider that can meet your long-term needs.
How do I assess the security measures of a colocation data center?
DTo evaluate security, consider:
- Physical measures: 24/7 guards, biometric access controls, video surveillance
- Network security: Firewalls, DDoS protection, intrusion detection systems
- Certifications: SOC 2, ISO 27001, PCI DSS, HIPAA
- Data protection measures: Encryption, secure storage, backup systems
- Access policies and procedures for staff and visitors
- Regular audits and penetration testing
The best colocation services will have multi-layered safety protocols to protect your servers and data from both physical and cyber threats.
What are some common threats to data center security?
Common threats to data center security include:
- Cyber attacks (e.g., malware, ransomware, DDoS attacks)
- Physical breaches and theft
- Insider threats from malicious or negligent employees
- Natural disasters and environmental hazards
- Social engineering attacks
- Software vulnerabilities and zero-day exploits
Data center safety solutions must address these diverse threats to provide comprehensive protection.
Summary
Choosing the right colocation data center is a critical decision that can significantly impact your business operations.
By understanding what colocation data centers are, their benefits, top providers, how to select the right provider, and future trends, you can make an informed decision that aligns with your business needs.
Colocation offers cost savings, enhanced safeguarding, extensibility, and flexibility, making it an invaluable solution for modern companies.
As you navigate this landscape, remember to assess your business needs, ask the right questions, and thoroughly review SLAs to ensure you pick a provider that meets your expectations.
