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Collocation Cost Considerations

Collocation Cost Considerations

As businesses grow, the need for reliable and scalable data center space to collocate IT infrastructure also increases. Any data center or power downtime can have crippling effects on a business in the form of decreased productivity, customer churn and lost revenues. Successful businesses often outgrow their own in-house computer and telecom room quickly. Data center expansion sounds like the way to go if you can get budget approval. 


More and more enterprise IT leaders are finding it easier to outsource their workloads to colocation and cloud providers. Even if the initial estimate for constructing an add-on facility raises eyebrows, you’ll need to factor in operational costs as well.


Building an in-house data center is expensive. In addition to tenant improvements to raw space, a company must consider the cost of bringing in more utility power and new carriers into their own data center.


Building your own in-house data center is not a walk in the park. You need to make an informed decision about the feasibility of building one versus collocating your workloads to a colocation provider. An in-depth analysis of the costs, risks, and opportunities corresponding to each option helps uncover hidden costs.  Below are a few to keep in mind.


Construction– planning, engineering, building, and completion, a typical data center for single tenant use could take 12-24 months to be move in ready


Core business and staffing -Building a data center means a company will need to shift time, knowledge, expertise, and additional personnel resources away from their core business to understand the specialized needs in a data center such as power, cooling, fire suppression, security, maintenance and local/environmental codes.


Ongoing support -Businesses must also consider not only the initial startup costs involved with construction but also the ongoing costs of power, heating and air conditioning, along with the security and maintenance of these physical assets.


Connectivity -Building a single tenant data center can add additional costs of connectivity from carriers and ISPs by adding fiber and local loop charges.


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