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7X24 MAGAZINE FALL 2014
Weighing out the pros and cons of build vs. buy isn’t a difficult exercise, as evidenced by these key points. In the next section
we’ll explore in more depth a few of the key advantages of colocation.
Measuring the Value: Advantages of a Third-Party Service
Hiring a colocation data center service provider is a viable alternative for companies looking to avoid both the cost and the
responsibility of building andmaintaining a data center. Instead of constructing their own facilities from the ground up, companies
can partner with a third party to reduce the amount of capital they spend while also taking advantage of state-of-the-art equipment
and facilities.
Here are some of the most compelling arguments in favor of colocation:
Cost
Cost is a significant consideration in any IT investment. When it comes to the data center, many items impact the bottom
line, including energy consumption, hardware maintenance and personnel. There are also hidden costs to consider, such
as building leases, physical security and access permits.
By partnering with a third party, a business avoids many of the costs associated with building a data center. Though some
operating expense (opex) does still apply, many of the capital expense (capex) charges are eliminated, including those
needed to build a base shell, support security initiatives and procure and install a mechanical and electrical infrastructure.
Power consumption will still be a factor, though it is often much cheaper in a third-party facility. Colocation customers
will generally pay a flat power rate of $15 to $50 per amp per month, or the charges will be based on a meter reading
at the local commercial power rate.
Staffing charges are also greatly reduced, as a service provider will have its own employees on hand. Though most
colocation agreements include a “remote hands” service charge and an annual management fee, these expenses are
significantly less than if a company were to hire its own staff.
Staffing
Many companies lack the expertise needed to run their own data centers. While the knowledge required to build a
facility is one thing, the company must also consider the ongoing operation of the data center and its equipment for years
to come.
The average company has more important things to worry about than its data centers. A retailer or a bank, for example,
will generally not be well versed in the technological expertise required to support a modern data center. This is simply
not an area of focus for firms selling products or banking services to the public.
