A colocation center, often referred to colloquially as a "colo," is a data center with access to multiple networks and Internet service providers. Companies take advantage of colos to reduce costs, increase their available bandwidth, and, in some cases, gain access to the very latest technology. Some organizations colocate different aspects of their IT infrastructure networking equipment, servers, or storage devices to free up individuals to concentrate on core competencies.
What sort of companies use colos? Web commerce companies, telecom providers, and enterprises looking for disaster recovery (DR) facilities are major colocation users. The reason is simple: Installing a fully redundant network connections and its required bandwidth can cost a fortune. For a fraction of the price, an enterprise can harness extra fat pipes operating at the highest speeds on the market and access multiple Fibre Channel backbones, such as Global Crossing and Qwest.
As a result, the colocation center can choose the best route for traffic, and a failure in one network exerts zero impact. These facilities are also protected by state-of-the-art UPS systems, diesel backup generators, and the latest in environmental controls.
Obviously, a number of factors add up to top-notch colocation service. It is best, therefore, to evaluate potential facilities carefully.
"Look for a solid service-level agreement from a colo that is based around always being live, full redundancy on support systems (including networking, air conditioning, cooling, fire dousing, and power supplies), and physical security that extends from the sub-floor to high-ceiling walls and cages," says Clive Longbottom, a analyst with U.K.-based IT consultancy, Quocirca.
"The colo should also offer you full 24x7 support, complete system mirroring, DR services, and remote access capabilities," Longbottom concludes.
When assessing the various options, though, it would be a mistake to focus only on the technical infrastructure of the center and the technical capabilities of its staff. Infrastructure and staff are absolutely critical to finding a good colocation partner, but there are many equally important factors that deserve as much, or more attention.
"One of the most overlooked, but crucial considerations, is the investment made in process development and compliance," says Lenny Monsour, director of product management at SunGard Availability Services in Wayne, Penn. "Most outages can be prevented with good processes and automation systems. Providers with process discipline that is validated by internal and external auditing procedures are the ones that maximize information availability."
Another non-technical element to consider is the financial stability and reputation of the provider. Nobody wants to be forced to move equipment because of the financial difficulties of the colocation partner. Most companies, understandably, are adamant that the colo be a financially stable entity; however, there is still a somewhat high casualty rate in the industry. Longbottom feels there are still too many providers, and therefore collapses and closures are bound to continue for another few years. Look for a partner that is able to continuously invest in infrastructure, has current generation gear, and a consistent and verifiable record of profitability.
Who Needs a Colo?
Not everybody, of course, needs colocation. Such facilities tend to be most essential for companies that have much to lose from systems failure and that don't trust themselves to be able to provide DR in a cost-effective manner in-house. Based on those parameters, most large companies are likely candidates.
What about the middle and lower end of the market?
"For midsize companies, a simpler form of colo makes sense, where it is just a case that the colo company is in a better position to look after the kit than the owning company," says Longbottom. "For smaller firms, hosting makes more sense no need to own the kit at all, just subscribe to application or functional services."
He highlights a key difference between colocation and managed hosting.
The former typically provides access to a shared raised floor and power infrastructure. Customers of colocation providers often contract for their own network facilities and rely on their own technical staff. A managed hosting provider, on the other hand, tends to focus on providing the technical services and equipment, in addition to the data center infrastructure, to help companies maximize information availability, security, and performance.
"The best approach to understanding the type of hosting provider that meets a company's needs is to clearly define the company's individual requirements before the search begins," suggests Monsour. "Matching providers' capabilities to individual requirements is the best way to assure the selection of the right hosting partner."
Like Longbottom, he believes companies of all sizes can benefit from colocation or hosting services. And the decision is often prompted by a specific business driver. For example, a company that must make an incremental investment in a data center or power infrastructure will often migrate critical systems to a service provider rather than continuing to make non-strategic investments in an internal data center infrastructure. Mergers and acquisitions, technology refreshes, or deploying a new customer facing critical application can also trigger a move to colocation.
"Companies that have already made a significant investment in their data centers and that have excess space, power, and HVAC capacity are typically often not an immediate candidate," says Monsour.
Keeping DR Costs Down
Perhaps the chief driver of colocation currently is the growing understanding of the need for a remote data center that can take over immediately in the face of a disaster impacting headquarters.
"Colocation can be a big money-saver over building a remote site for yourself, and these companies can provide the servers, networks, and even office space you need in a disaster," says Stephen Foskett, director of strategy services at GlassHouse Technologies, a storage consultancy based in Framingham, Mass.
He points out that such services are, by definition, shared among many companies. By necessity, the limited resources at colo sites are offered on a first-come, first-served basis. So if a widespread disaster like a hurricane strikes, you may be left out in the cold when you need the site most. The better-established providers will accommodate spillover business in more remote locations, but that can add time and cost to any disaster operation.
"Check your colocation contracts, and be ready to declare a disaster quickly to make sure you have access to the resources you contracted for," says Foskett.
Gartner analyst Donna Scott suggests a way to avoid that pitfall. She believes it makes sense to split DR resources among several providers have some collocated, some hosted, and others handled internally.
"If you don't have your own second site, colocation can be effective and reduce costs," says Scott. "One way to do it might be to colocate your Web infrastructure, have a mainframe hosted by Sungard, and protect other areas yourself."
Longbottom reinforces this point, indicating that colocation providers specialize in the establishment of fully redundant, completely protected centers. Therefore, they are much more likely to get it right than an enterprise fumbling along attempting to establish a second site on its own.
"The nature of a colo/hosting company is that it's very being depends on getting this sort of DR stuff right," he says. "Therefore, utilizing their site and technologies should be better and more cost effective than trying to create such a solution in-house."