Colocation costs you should consider for your environment

Colocation is widely recognised as a way of reducing the cost of running core servers, storage, networking and other capabilities. When you’re talking about relocating the core of your business, however, you need more to go on than just a hunch. Thankfully, it’s not hard to build a solid business case by considering a range of costs that colocation affects.

Before you even begin to count the cost of colocation, it’s important to consider the costs you’re already incurring from running an onsite data centre. This includes the costs of managing aging equipment, powering and cooling the area, paying staff, and so on.

You may want to get an outside appraisal of your power usage effectiveness (PUE) – an industry-standard measure that compares the amount of energy used by a data centre overall to the amount of energy that it delivers to IT equipment; the extra energy is consumed by air conditioning, security systems, lighting, and other environmental systems.

An ideal PUE is 1.0 but typical data centres measure 1.4 to 1.6, while data centres within an office space often range to 2.8 or higher. Economies of scale help larger facilities achieve lower PUE measurements, as do energy-efficient building designs. That means you’re probably paying far too much to cool and power your in-office data centre than you need to be. Potential cost savings from electricity usage alone may justify a move to a colocation facility.

Another useful efficiency metric is NABERS (National Australian Built Environment Rating System), an Australian standard that rates buildings’ overall energy efficiency. An in-house data centre can seriously compromise a building’s NABERS rating – which can create problems attracting tenants that are increasingly setting minimum standards for the properties they will occupy.

PUE and NABERS ratings will help you evaluate the efficiency of your current environment against that of a third-party colocation hosting site – but how much will it actually cost to house your equipment there? Here are a few elements to consider:

Number of racks: If you’re moving existing equipment to the colocation site, you’ll know how many racks you need. If you’re moving to virtual servers, consider whether consolidating multiple application servers can reduce the number of racks you need. A high density rack of 12kW would allow you to save not just on rack costs but also on maintenance of the servers.

Power: Your power costs will be tied to the equipment you install and the number of racks you commission. Since your infrastructure will be running 24x7, weigh your ongoing power costs against those of high-volume colocation facilities that may be pushing their own power costs down by, for example, generating power from onsite solar panels. These costs will also be affected by the PUE of the facilities you’re considering: if the data centre is relatively inefficient, these costs may be passed on to you in the form of higher charges.

Network connections: Internet bandwidth is crucial for high-performance, reliable business operations. Make sure your colocation provider not only offers you enough bandwidth and enough data per month– but that they are running multiple outside links to different telecommunications providers to ensure redundancy. Some hosts also have direct connections to cloud services like Microsoft Azure and Amazon Web Services – which can dramatically improve performance if you are a heavy user of cloud services.

Setup: Some colocation providers will charge a setup fee to establish the rack and provide induction services; some will negotiate this cost down, or have it eliminated altogether.

Remote support: Servers are increasingly reliable but they still need some hands-on support. Some colocation hosts maintain a network operations centre (NOC) with skilled professionals to take care of hands-on tasks like restarting servers, changing backup tapes, and so on. This will be charged on a per-hour rate. Evaluate services available and guaranteed response time.

Procurement: You can bring your existing equipment into a colocation facility, but if it’s old it may be more cost-effective to acquire new servers from your provider and just migrate your applications onto the systems. Colocation providers can help you review and consolidate your infrastructure to ensure it’s running as efficiently as possible.

Lay down your plans in detail long before your move, and weigh all of your options to determine the colocation host with the best fit of services for you. By shopping around, you can be assured that your move to colocation will herald a new era of cost-effective, scalable computing. Or contact us to discuss how you can optimise your data centre.

Gareth Cleeves min
Author Name: Gareth Cleeves

Gareth Cleeves is a Product Manager at NTT ICT, the Australian arm of NTT Communications.  He works with both products developed locally by NTT ICT, acting as the product owner and architect, as well as global products developed by NTT Communications, working to localise and commercialise products from across the...

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Added 30 August 2017

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