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How to: Choosing the right colocation provider

With a plethora of private data centres available and a remarkable number currently being built, it is an opportune time for businesses needing to expand their data capacity to take a closer look at what is on offer.

The current boom in data centre building and planning – with the likes of Dell, HP and Fujitsu announcing new facilities in Australia, along with Macquarie Telecom, Polaris, NextDC and Blue Coat and the opening of a new Sydney centre in June by Equinix – is proof if need be that outsourced services, both colocated and managed, are in increasing demand.

In fact, almost $2 billion in new investments has been announced since January this year, according to IDC Australia senior analyst Trevor Clarke. Much of this is being driven by concerns over energy costs and the impending carbon tax.

While some businesses will turn to managed services for their data needs, colocation is still a popular choice. The advantages to this approach include cost efficiency, security and network connectivity and integration.

Colocation services have been around for a lot longer than managed services like the cloud-based platforms coming through today, Internode's product manager Jim Kellett says.

“There is a historical bias for people preferring to do things that way,” he says. “You get complete control over your environment and it can be quite cost-effective to go with colocation – essentially a one-rack unit at a data centre these days will be about $100 and $150 a month.

“You don't get the levels of redundancy that you get with a managed approach but it is really horses for courses. You only have to add a rack-mounted server and a usage plan and it is pretty much job done.”

Equinix Australia's managing director, Darren Mann, says enterprises can enjoy the time and cost benefits of using shared data centre infrastructure while maintaining maximum flexibility and control over their IT environment.

“Outsourcing to a colocation provider also has the added benefit of leaving the facility-based services to those whose core business is building and running data centres, allowing companies to concentrate on their own business,” Mann says.

The main things to look for when comparing colocation providers besides cost are physical security, proximity, power management and network connectivity, Kellett says.

“Colo has a number of different aspects to it. You want to have a look at the security arrangements, so physical security is important. It is pretty easy to set up a pretend data centre and for someone to nick your server and there goes your data.

“One of the biggest challenges is keeping it all cool. The link to power management is important because while every data centre will have a UPS (uninterruptible power source) of some description, UPS systems don't run air conditioners. You really need a place that has a UPS system and a diesel generator to back that up. The air con needs redundancy built into it too because it is quite remarkable how hot a data centre can get in a very short amount of time.”

Most businesses will want to link the colocated server into their own network or over to the Internet or both. Kellet says if you are going down this path and it is a significant part of your business, you need to look at physical redundancy and whether you are locked into buying services from that data centre provider or if they are carrier-neutral.

And then there is proximity. While most good colocation services will provide remote hand services as part of a basic deal, being close to your server will probably prove essential to most small to medium sized businesses in particular.

“Colocation is really just a real estate deal with an Internet service provider,” Kellett says. “If you do want to go and twiddle the knobs it helps to be within a half-hour driving distance and that counts if your colo provider is in another country or another state.”

For Mann, a proven track record of reliability is important in choosing a colocation provider, as is the potential that outsourcing offers in allowing businesses to concentrate on their core work while someone else looks after the infrastructure.

“There's one more very important point, which is a total mind shift from how the data centre has traditionally been viewed,” Mann says. “That is, start to consider how your chosen data centre can be a revenue centre, rather than a cost centre for your business. (Data) centres provide a wealth of business opportunity through the ability to interconnect with customers and partners across network, digital media, cloud/IT, enterprise and finance ecosystems.”

In terms of cost, a little bit of research is in order. Most providers offer similar cost structures such as block packages, which are charged on blocks of bandwidth, or the 95th percentile approach, which knocks off the top five per cent of peak traffic, often resulting in lower bandwidth costs overall.

Along with managed services, colocation is just going to continue to grow, Mann says. “More and more customers are seeing the benefits of outsourced colocation, demonstrated by the fact that demand continues to outpace supply.”


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