E-Handbook: How to build a successful colocation strategy Article 3 of 3



Pick the right colocation site for your organization

Colocation is more than signing a contract and installing hardware. Evaluate redundancy, rack space real estate and distance to ensure a successful colo partnership.

When it comes to colocation selection, most organizations spend time evaluating service provider offerings and taking a fine-toothed comb through contracts. But it's important to take some time to select the right colocation site.

Choosing the right location for your hardware makes it easier for your IT department to perform necessary maintenance, predict power availability, consider options for scalability and control service-level agreement (SLA) costs.

The single most important consideration is the organization's distance to the colocated data center. Distance is important for two main reasons: latency and manageability.

Latency increases with distance. If you choose a colocated data center that is too far away from your primary data center, then excessive latency can become an issue. There are a lot of options for colocation facilities, but many require you to perform your own equipment maintenance. You don't want to be put in a situation where someone must get on an airplane to replace a failed hard drive.

If your service contract doesn't include maintenance or if you have specific hardware needs, the colocation site should be in an area where you can easily perform maintenance or can easily contract out a third party to do so.

What about the weather?

Most areas are prone to forces of nature, such as tornadoes, hurricanes, blizzards and earthquakes, which pose a threat to networking and power connections. To avoid costly downtime or additional maintenance, ask colocation providers if they have measures in place for such disasters, from both a hardware and data recovery standpoint.

You should also consider a region's climate; outside temperatures affect how providers cool or heat their facilities. Though colocation providers supply the facility and temperature equipment, how they maintain the data center could affect costs for your organization.

Keeping colocation cost-effective

The cost of leasing space within a data center might change due to location and real estate availability. The local colocation market also affects cost, especially if hardware space is limited. This can result in a bidding war with other organizations that want to use colocation or steep premiums to use rack space.

Real estate costs are far higher in some areas than others. It is almost definitely more expensive to colocate data center hardware in New York or Hawaii than it would be at a comparable colocation site in Kansas. However, it isn't just real estate value that determines the cost of leasing data center space.

The amount of redundancy, size of the staff, technology refresh plans and percentage of occupancy affect data center colocation cost. Be sure to go over the SLA to see what is covered, because the most cost-effective option may not actually be beneficial or not provide any benefits beyond rack space.

Colocation pricing models play a big role in the overall cost. Some providers use an as-needed approach to pricing. They typically charge tenants based on rack space or square footage and a separate fee for power consumption.

Other colocation providers offer a flat rate. This all-inclusive approach is more convenient and leads to predictable billing. Flat rates may be more expensive than pay-as-you-go models because the pricing structure assumes that your organization uses the maximum amount of power provided.

Proximity to power

Power source is another factor in colocation site selection. If the site's data center is within a short radius from a hydroelectric plant, power rates are probably less expensive compared to a data center in an area with poor power infrastructure or limited access to resources.

Ask if the colocation facility has a redundant power supply. The data center should be serviced by two different power companies, using two completely different sources of power, such as hydroelectric and nuclear. This reduces the likelihood of a power outage occurring and ensures reliable operations.


Discussions about scalability with colocation often center on the availability of rack space. It is important to consider whether the colocation facility and provider can expand the facility to keep up with demand.

A data center in a dense urban area might not regularly build an annex or adjacent buildings to accommodate growth, whereas a facility located in the middle of the desert has more space to scale as needed.

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