I recently sat down with OneNeck’s Director of Business Development for Data Center Services, Karla Myers, to discuss what’s driving the shift to colocation, the key decision points one must consider when deciding to colocate and ways to recognize and avoid hidden colocation costs. Here’s what she had to say…
What are the most common reasons businesses are turning to colocation, and what IT challenges are they hoping to solve?
Much of the growth in colocation adoption is being driven by the financial and operational benefits associated with data center outsourcing, including:
- Cost Structure and Savings– Colocation offers a predictable OpEx model, with shared costs for state-of-the-art infrastructure and professional data center personnel.
- Extensibility to accommodate business growth– Many organizations have simply run out of space in their corporate data centers. They can no longer reasonably expand their technology footprint within their existing facilities. Outsourcing to a colocation provider eliminates any worries about growth. A colocation center is designed to grow with customers’ needs.
- Increased Uptime– Any business that relies on data for its operations has to be concerned with system uptime. The cost consequences of a data center outages continues to rise. Colocation aims to reduce risk to clients ensuring uptime – backed by a 100% SLAs.
- Meeting compliance and security requirements – For regulated businesses, compliance has become the centerpiece of data planning. Many of today’s businesses must comply with various government regulatory and industry standards. Without dedicated staff and compliance expertise, it is exceedingly difficult, not to mention expensive, to ensure that in-house data centers are compliant and auditable. A colocation provider can enable organizations to cost effectively comply with ever-changing federal regulations and industry standards such as HIPAA/HITECH, PCI, U.S.- EU Privacy Shield, FISMA, SSAE16, ISO and others.
- Expert Management – Internal operation of a data center consumes valuable ﬁnancial and human resources at every level of an organization. Colocation allows you to maximize the potential in your business by delivering state of the art infrastructure combined with professional facilities management.
In a build versus buy
scenario, what are a few considerations CIOs must take into account?
Data centers require scalability and redundancy, and that requires investment. When you look at the expense of maintaining this kind of data center infrastructure, it simplifies build versus buy considerations. Here are a few key considerations:
- Cost– A financial analysis is critical to making a sound decision about building or upgrading a data center or outsourcing to a colocation provider. With an on-premises data center, the organization has to absorb all operating expenses, where a colocation provider has economies of scale and negotiating power that allows them to build and operate their data center for less (i.e. lower cost/watt to build, better electricity rates, better bandwidth rates, etc.).
- Build Time– How quickly will you need your facility to be fully operational? A typical data center build can take 12-18 months from planning to completion. If you require data center space in a shorter timeframe, colocating with a data center provider may be the most viable option.
- Regulatory Requirements and Compliance – Maintaining compliance with external regulatory requirements such as HIPAA, SOX, GLB, PCI-DSS and other industry requirements is a burden for even the largest IT departments. Colocation data centers provide control environments to meet your compliance requirements.
- Environmental – Will the data center be located in a geographically stable location? One with a low propensity for natural disasters such as earthquakes, tornadoes and floods. If not, your company could be at risk for potential data center outages due to environmental issues.
- Outage Risk– According to the Ponemon Institute, the average cost of a data center outage rose from $690,204 in 2013 to $740,357 in 2015. The costs of downtime can be detrimental to the health of your business. When your data center suffers any incident and your data is not accessible, the result is a disruption in your business operations. The reliability of your data center to prevent and recover from unforeseen incidents is critical to your organization’s success.
- Data Center Scalability – Under or over provisioning can cause any number of problems as you could end up with too much empty space in your facility or not enough power, cooling or connectivity. In contrast, leasing data center space oftentimes allows you to expand as your needs do.
- Operating a Data Center – Internal operation of a data center consumes valuable financial and human resources at every level of an organization. Colocation allows you to maximize the potential of your business by delivering state-of-the-art infrastructure combined with professional facilities management. This frees up internal resources that can be shifted to strategic business projects, shortening deployment time and improving revenue generation.
Security is top of mind, and due diligence is perhaps the most important piece of a data center security strategy. What are some qualifying questions business leaders can ask a potential data center colocation provider in terms of security?
Most colocation providers implement a variety of measures to help guarantee security and compliance within their colocation facility. However, never assume anything. Here are a few key questions to ask to ensure your valuable assets are protected.
- What measures are in place to ensure physical security? If physical security is top-of-mind for your organization, you’re not alone. With a growing number of potential threats, both digital and physical, it’s no wonder. Your valuable IT assets should be safeguarded against both man-made and natural disasters. Physical security measures should include video surveillance, mantraps and biometric readers.
- What measures are in place to ensure network security? The massive increase in malicious network traffic and the proliferation of SPAM have caused many businesses to be concerned about the security of their network. To safeguard your network, your colocation provider should provide IDS/IPS (intrusion detection services / intrusion prevention services) and basic firewall services. Additional optional services may include virtual firewall services, VPN services, content filtering, SPAM filtering, virus filtering, spyware removal, real-time traffic analysis using net flow reporting and real-time bandwidth reporting.
- Reliability, what’s your SLA? Uptime in a data center is non-negotiable. 100% uptime SLAs will provide you with the confidence in knowing that you’re most important resources and information will be available when you need them.
- What compliance standards can you help me meet? As if IT departments didn’t have enough to worry about these days, they also have to ensure that their organization is in compliance with various industry and federal regulations (PCI, HIPAA) which are designed to keep sensitive customer data safe. Your provider should provide as much assurance to their customers as possible, that their practices and methodologies are compliant with various compliance audit and certification requirements including SSAE 16 Type 2 SOC 1, HIPAA, PCI and ISO 27001.
Unanticipated fees can lock the business into an agreement that isn’t nearly as cost-effective as imagined. Are there ways to recognize and avoid hidden colocation costs?
When working with a reputable provider, there should be no surprises. To avoid getting “nickel and dimed,” you will want to make sure the following items are spelled out:
- Power costs – Depending on the data center’s pricing model, utilities may be included or billed separately. Make sure you understand which model you are contracting under and ask for estimates so you know how the provider calculates and bills the power consumption.
- PUE – data center PUE (power utilization effectiveness) is an industry standard measurement of the efficiency of a data center and is a common component in the utility consumption invoicing. The lower the PUE, the more efficient the data center and the lower the power costs will be that are passed on to the clients. Make sure you understand the PUE of the data center and whether or not the provider is willing to put a guaranteed PUE in the agreement.
- Power Overages – If you are under a contract that bills for a committed volume of power, make sure you know what the charges will be if you exceed the commitment. Many providers will charge double or triple the normal rate for overages.
- Cross Connects – Every data center client will need at least one cross connect to meet up with the carrier of their choice in the data center’s meet me room and many providers include some number of cross connects in the colocation agreement. Even if you aren’t ordering a cross connect right away, make sure you know the charges at varying volumes.
- Remote hands – Most providers have some level of remote hands services as a courtesy to clients so they can avoid trips to the data center for basic services. Make sure you understand what those charges are for both regular business hours and outside of regular business hours and know what increments of time will be billed.
- Internet Bandwidth – When purchasing a committed volume of internet bandwidth from your colocation provider, make sure you ask what the per Mb charges will be if you exceed the committed amount.
Why should businesses colocate with OneNeck?
OneNeck oﬀers purpose-built, concurrently maintainable data center facilities fortiﬁed for maximum performance. We oﬀer high-availability and high-reliability colocation services that go beyond mere infrastructure.
Our goal is to ensure our eight US-based data centers
have exceptional security, redundant connectivity and climate-controlled environments ideal for protecting your data. OneNeck data centers are designed around an extreme availability architecture, and in addition, are built in geographic areas that are safe, secure and have access to reliable, low-cost utilities. And if it’s validation you need, they’re certified by third-party commissioning engineers and agents, and independently tested and validated.
LEARN MORE: Reasons to Invest in Colocation Hosting