When you’re first exploring colocation costs, the numbers seem straightforward: cost per rack, cost per square foot, cost per kW, etc. And yet there’s no mention of what is — and is not — included in those prices. What will a cross-connect cost you? What’s the pricing structure for the services you’ll be stuck using? How much can you trust the team?
Without the answers to those questions, the colocation sticker price is moot. The added fees, hassle, and — god forbid — outages and downtime can push your costs well past what you were expecting.
To do a proper colocation pricing comparison, you need to know what all the costs will be, not just what’s advertised. That means knowing what questions to ask, and how to assess the answers. With that, you’ll get a complete enough picture to make a decision based on what matters to your business, not the empty promise of a base price.
Why space isn’t the most important factor in colocation costs
We wrote a whole article on why you shouldn’t approach your colocation facility like real estate. And when you buy solely based on the space, that’s effectively what you’re doing. That’s not to say you shouldn’t look to get a deal, just that space is only one factor, and a relatively minor one at that.
Colocation costs can come per rack unit, per cabinet, per cage and even per square foot. Which one works best for you is largely a factor of how much colo hosting you need.
If you’re only to colocate two servers, pricing by the square foot won’t be beneficial for you.
Once you figure out which of the colocation pricing models works best for you, you can effectively set space aside as a factor to dig into seven questions that are much harder to answer — and that have much more of an effect on your colocation hosting solution.
What are your colocation power costs — and how much are you really using?
Power has always been the king of colocation pricing. By many, it’s seen as the big variable. It certainly matters, but as you’ll find with many things in colocation, there’s a catch. Colocation power pricing can come by the circuited power, by the kilowatt or by the kilovolt amp. And if you have enough scale, you can even buy metered power, essentially a cost-plus model where you play your electricity bill, plus some fees.
With all of these, though, you need to make sure your colocation hosting company will actually allow you to use all the power you’re paying for.
Often, there are local building and electrical codes that keep you from using the full power.
Another colocation host up the street may look like its power costs 20 percent more, when it reality it’s just advertising the price of the power you’ll be able to use.
Most data centers include cooling costs in with the power fees, since they’re so often correlated to how much power you’re using. Sometimes the cooling costs will be charged per square foot, other times they’ll be a part of the kilowatt rate or circuited power charge. If you’re on a metered power contract, it may be an additional percentage of your bills, so you’d pay 1.5 times metered power, for example, to cover cooling costs. This is why it’s so important to find colocation hosting service providers with good PUE, or power usage effectiveness, ratings. That way you’re not paying for inefficiencies.
What kind of network are you getting with those colocation rates?
When it’s time to decide between colocation hosts, you can’t stop at space and power. Take the network that you’re on. Your provider may say that it has 24/7 uptime, but leave out the regular planned outages it relies on. Maybe it doesn’t have the blazing fast connections you need to scale, or a central location like Chicago to help with latency. Looking into the colocation bandwidth pricing will give you a sense of how a partner can serve you now, and where it can take you.
Before you create a list of colocation providers to reach out to, start by thinking about what is going to best serve your business.
The colocation facility you pick will be the foundation of your business — it’s not a place to save a buck.
Pick wrong, and you’ll stay on shaky ground. Pick right, and you can go anywhere.
If this is just a backup facility and all your resources are extremely dynamic and standing across multiple facilities, you can maybe get away with a mid-range colocation bandwidth cost. If, however, that’s not the case, or you rely on your applications being up all the time, or your RPO and RTO targets are very tight, or any number of other things, then you owe it to yourself to find the partner with a network you can trust.
What outside services are hiding behind this colocation cost?
When you pick a colocation quote, you’re also picking the quotes of all the carriers already connected to that facility. That’s because you’re generally going to be limited to the providers your colocation host has chosen to work with. Their costs may not be listed in your colocation hosting pricing, but they will certainly be affecting your business.
Figuring out which vendors you’ll be able to work with, what their pricing models are, what network capacities and what it would cost to work with a different vendor that best meets your needs are all a critical part of understanding your true hosting costs.
While it’s usually simpler and cheaper to work with the carriers inside a colocation facility, all of the best colocation hosts will offer MMR, or meet me room, access, where you can have your preferred carrier connect into the building. Unlike in a normal building, though, this isn’t as simple as paying a one-time fee. Most charge a recurring fee, and some even call it a corkage fee — admitting that it’s flat-out extra fee just to do something that would be free in your own building.
To avoid these fees — and this hassle — you need to find a colocation provider big enough to have all of the carriers and partners you’d want in-house. You also need to have a list of the necessary providers for your business, so you can get a sense of what it would cost to work with them in each facility.
What kind of support will your colocation hosting costs buy you?
Or, to put it another way, how little will you have to think about your infrastructure?
The value of colocation is that it takes all of the worry of managing a data center away, and gives you that time back to focus on the technology that’ll take your business to the next level. That only works, though, if you’re getting the hosting colocation services that you need.
For many organizations, especially mature ones, the greatest savings will come not from a thousand dollars off the price tag, but from expert support. These teams have the experience and insight necessary to save you money. Take the time to figure out what’s available to you — from on-site electricians to easy cross-connects to total re-architecting. Learning how to maximize those services is the best way to get the full benefits of colocation hosting — and a fantastic way to save big money.
What colocation hosting services are included in the pricing?
Once you know what’s available, figure out what it’ll cost you. With the right colocation facility hosting your resources, you shouldn’t ever need to walk into your space in person except to de-rack and re-rack a piece of equipment. Even then, a good vendor will always have a team that’s quicker and cheaper to use than getting in a car and going over yourself.
Consider this: It’s 1:30 a.m. on a Tuesday, and you have woke up to a call telling you a critical piece of environment is down. Who do you think is better prepared to reach their hands into the heart of your IT stack: someone who just rolled out of bed and is panicked, or someone who’s two hours into her work day and specializes in doing exactly this?
That’s how the right provider helps both your business run smoother and you sleep sounder.
To get the most value, get a sense of how experienced the team is, and how much it will cost you to use them. Ask if they’ve been able to save other customers money. Then ask to talk to those customers. Once you’re satisfied that they can deliver, get a colocation price list that includes those services and the more mundane things like how much it costs to cross-connect to providers within the facility. This is the value you can’t get when you host your own data and applications, and these are the costs you need to fully understand if you want colocation to be as transformative for your business as it can be.
How flexible are the colocation quotes you’re judging?
Business needs change faster than contracts. And yet typical colocation costs are based on at least a yearlong agreement, sometimes three or five. While all the fees and charges mentioned above do add up, they’ll never be as expensive as paying for colocation you’re not using — or worse, limiting your business to stay on the infrastructure you have.
That’s why it’s so important to figure out what kind of flexibility you have within your colocation prices. Is there room to double your footprint, and if you do, will you get a better rate? And what about the cloud?
For most businesses, it’s no longer a debate of cloud vs. colocation — it’s much more often a reality of cloud and colo.
If you decide the time is right to move some or all of your resources to the cloud, you want a colocation hosting company that can do that — and that won’t keep charging you for colocation you’re not using. At ServerCentral, we protect your infrastructure investment. If you want to move your spend to the cloud, we’ll let you do that at any point within your existing contract. Right now we’re the only colocation provider offering a fee-free move to the cloud whenever you need. If you know cloud is in your future, that savings — and security — can’t be beat.
And the final question — how much can you trust these colocation providers to deliver
In all six questions above, there are hints of this, the absolute biggest question you have to answer when choosing a colocation vendor:
Can you trust them?
If you can’t trust the team you’re working with, you’re not getting colocation.
Inevitably, there are going to be failures and outages — that’s just the reality of any infrastructure. The question you need to ask yourself is can you trust your colocation partner to prevent them as much as they possibly can, and, when they do have them, can you trust them to bring you back online better than you could have yourself?
At ServerCentral, we take the time to really get to know the people we’re working with, because we need to be able to make the same decision you would, quickly and in critical moments. That means understanding your business, your technology and exactly what both need in every situation.
Similarly, we want you to understand us — what services we offer today and which we’ll offer in the future. You should see the full roadmap for our business, because it needs to line up with the roadmap you have for your company. Your colocation provider is so much more than just hands you can task by the minute to push buttons in your environment. We’re your compliance and security team.
To know for sure that you can trust a colocation partner, we always recommend visiting the facility in person — we even have a virtual tour of our Chicago colocation facility so you can get a head start. An in-person visit is the best way to kick the tires, make sure things check out and lay the groundwork for the kind of partnership that will make both sides successful.
While all of the above can more or less be quantified for an effective colocation cost comparison, this last one can’t be reduced to a number. Trust is also, in many ways, the most important variable in choosing a colocation provider. So you should collect all the numbers, use these guidelines to normalize them and compare everything on level ground. But then, save room for your judgment. It may be the deciding factor between a mediocre infrastructure and colocation that can take you where you need to go.
Interested in how ServerCentral delivers colocation? Check out our colocation pricing page.