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#Colocation, more consolidation our there – must be a good #idea

By October 9, 2013 Colocation

Colocation sites being acquired all over. Just last week Rogers announced the acquisition of Pivitol and Granite Networks facility in Ottawa. What is up?

Colocation is the next big thing. Kind of like ‘cloud’ is the next best thing. But colocation is similar to cloud, they are not new and they have been around for years, if not at least two decades now.

Cloud as we call it today, in the 70’s and 80’s would have been called computer sharing. If you remember American Presidential Hopeful Ross Perot, he built a company called EDS (Electronic Data Systems) which was in the business of ‘sharing’ unused capacity on corporate mainframes. Early on, he noted that not all companies could afford these large mainframes, and those that did only utilize a fraction of the over-all capacity on these machines. His idea was to share capacity. Years later, GM acquired EDS. The rest became history.

Colocation has the same auspicious beginning. These severs, mainframes and central storage devices were located in ‘common’ facilities called data centres (or centers to our friends in the south). Inside them was all the data and processing resources that powered and stored most of the fortune 100 and fortune 50 organizations. We connected to those mainframes and servers with leased lines with fancy names like ‘data pack’, and ‘frame relay’ using not routers but frame relay access devices from companies like Gandalf (remember them?).

Today we use the Public Internet, The Private Encrypted Internet (by way of a VPN or virtual private network) or a private and secure Wide Area Network Connection (like a point to point Ethernet or Managed MPLS link).

Today, not much has changed. We still have rooms with power, generators, air conditioning and access to bandwidth. Back in the day, your bandwidth choices were pretty much limited to 1 or 2 players. The main ILEC or phone company and a small handful of 1 or 2 providers who pretty much bought telco last mile and connected you to ‘their’ backbone. It was pretty common to see 56 kbps, 128 kbps, 768 kbps. Rare was 1 mbps or more. The cost of 56k was typically over $1000 per month. We were also paying over $0.20 cents for long distance (if you had a plan) to put things in context.

Today, the best of colocation houses are considered ‘neutral’. This means they are in the business of providing hydro, cooling, and security as you would expect, but they also provide bandwidth in a ‘neutral’ way. Let me explain further. If you colocate at a Frontier facility, we can provide bandwidth, or, you can have your own bandwidth brought in. It is non-preferential.  If you use yours, you pay a pretty modest cross connect fee to hit the meet me room. If you buy bandwidth from Frontier, we pick up the cross connect fee.

With the other guys, it is often prohibitive. If you want to colocate with them, and you don’t want to use their bandwidth the following may be the likely realities. 1.You can’t. And to be specific they won’t let you. A real big problem after the fact! 2.You can, but it is tremendously expensive and the provider will force you or your broadband provider to jump through hoops or use them as an access provider ‘inside’ their own building will be horrible and reluctant

Not great really.

So, for a quick check-list consider the following.

  1. What is the cost of colocation
  2. What is the cost of upgrading from one cabinet to another
  3. Are downgrades allowed
  4. What is the cost of power, what limits are in place to how much power you can have
  5. What are the cross connection fees
  6. Can you cross connect inexpensively (or free) to your adjacent cabinets
  7. Are their surcharges to bring in your own ‘independent’ broadband
  8. If you are colocating voice equipment, where are the voice lines coming from and can you use a diverse provider?
  9. Is it even allowed?
  10. How long has your provider been in the colocation business (noting that acquisitions don’t drive organic experience).

Colocation is a fantastic opportunity to add resilience and reliability to your key business applications. These are not limited to just applications, think about colocating your voice equipment there as well.

Examples of what people are migrating?

  1. Accounting software and databases
  2. Back up data bases and second or third tier storage (off-site)
  3. Actual customer private phone systems (newer ones that support SIP side connectivity) or, redundant gateways incase of a primary site failure
  4. Mail Servers
  5. Virtual Desktop Server architecture
  6. Virtual Servers
  7. And…. all the above with geographic considerations

We can help you navigate through this.

We are pretty good at it, and worse case, we provide some pretty meaningful advice.