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Why Colocation?

Colocation Offers A Cost-Effective Answer for Today’s Murky Economic Climate

The signs are all around us. The job market appears to be slowing, credit conditions are tightening and a recent banking crisis has raised concerns about a possible impending recession in 2023. While that topic continues to be debated in headlines across the country, it gives room for pause about the need to consider the smartest ways possible to not only maintain, but to continue to grow, a healthy bottom line.

In the data center industry, one of the often-discussed measures for saving IT dollars is colocation. Why? Because building, staffing, and operating an enterprise-level data center can be a daunting task that is extremely capital intensive, so outsourcing is attractive. Being a tenant at a colocation facility can take some of the burden off corporations and reduce their capital expenses.

Rather than housing IT operations in their own data centers, a growing number of organizations are turning to colocation facilities – which house servers and other equipment from a number of different companies in one location. Quality colocation providers will have the technical staff to manage and maintain the world-class infrastructure that companies require for their critical data.

Market statistics demonstrate colocation’s rising popularity. According to a study by Technovia, a technology research firm, the global data center colocation market is expected to grow by $46.76 billion from 2022 to 2026, with a year-over-year growth of 13.35%.

Another study from Info-Tech Research found that 64% of organizations use colocation services for some or all of their IT operations.

The Advantages of Colocation – An OpEx vs. CapEx Model Offers Significant Savings

In the typical colocation model, a business houses its privately owned IT infrastructure in a data center facility and pays the provider for space, energy and other operational costs. In some cases, technical management of their systems is also part of the deal.

Some companies, however, have seen the benefits in moving from that somewhat capital-intensive approach to a fully OpEx IT infrastructure model, meaning they also outsource the ownership of the IT equipment itself. In an OpEx, or cloud, model, customers pay a monthly subscription fee to use the provider’s hardware rather than purchasing and maintaining their own IT infrastructure, as in a CapEx model. Typically, in such arrangements, the colocation provider also handles system maintenance and system expansion – thus freeing the business from the prospect of spending millions to maintain, upgrade, or purchase new hardware in the future.

Another major benefit provided by the OpEx IT infrastructure approach is flexible spending, which gives the client the ability to expand or reduce resources based on evolving needs. Adjustments can be made at the flip of a switch accommodating immediate requests in real time. Basically, IT capital expenditures become a monthly recurring operational expense, rather than a company having to suddenly spend $2 million tomorrow to buy their own hardware when aging equipment finally calls it quits.

Some of the other major benefits of colocation include:

Energy Cost Savings – With power costs climbing steeply in some areas, colocation facilities have become more attractive since they allow the data center’s energy costs to be spread over multiple users. Colocation also gives customers access to greater bandwidth at lower cost by benefiting from the facility’s pooled resources. In addition, top-of-the-line colocation providers invest in infrastructure advancements that enhance energy efficiency, which helps to stabilize costs for everyone.

Enhanced Security – Colocation (or “multi-tenant”) data centers, in general, offer a higher level of physical and cyber security than individual businesses. At quality providers, several layers of infrastructure security are in place to maintain operations in the event of a power outage. Redundancy is built in across all platforms, solutions, and employee responsibilities. At the same time, physical security measures, such as limited building entrance points, key-card access to private areas, 24/7 security staff, and multiple layers of locking doors ensure that systems are safe and only accessible to qualified personnel. Additionally, carefully monitored cooling systems make sure that proper temperatures are maintained for sensitive computer equipment.

High Quality, Accessible 24/7/365 Support – At respected data centers, customers enjoy greater access to support services. The best operators offer flexible support along with a personal touch, consultative approach, and a fast response to customer needs.

Knowledge Base – Through colocation, customers also gain ready access to a highly trained team of engineers, hardware specialists, software technicians, and other experts to help them quickly resolve any issues. In essence, these experts serve as an extension of the company’s internal IT team.

LightEdge Can Help

As a top-tier colocation services provider, LightEdge provides a high level of availability and reliability through secure, certified data centers and dedicated staff on-site. Its customized and scalable services give you control, whether you need a colocation rack, cage, or custom suite now or in the future. Get started today with a free quote from one of our colocation specialists. Contact us here.


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