Grow Your Own Data Center With Colocation

It's quicker and a lot less expensive than building your own facility.

Brian Burch knew the moment had arrived. Two of his data center's key services -- availability and business continuity -- needed fast and dramatic improvement. Design and location limitations meant that his company's existing data center couldn't be upgraded to the levels necessary to provide the improvements in functionality and performance that he required.

So Burch, senior worldwide infrastructure director of Kemet Electronics, a capacitor manufacturer headquartered in Simpsonville, S.C., decided it was time for his data center to split.

Even in today's challenging economy, enterprises are facing rising internal and external demands for IT services. When an existing data center can no longer handle an organization's IT burden, or when it becomes necessary to establish a secondary site to provide enhanced disaster recovery capabilities or regional network support, an important decision point has been reached.

For a number of enterprises, the obvious solution is to add another data center, and for many of those it means partnering with a colocation service provider instead of building a new facility of their own.

If you're considering colocation -- or colo, for short -- it's essential to do your homework, experts say. "You absolutely need to do the buy-vs.-build analysis," says Jeff Paschke, an analyst at Tier1 Research. But having said that, he suggests that "buy" may often be the best choice. "I am a former enterprise data center manager, and from what I know now, more should be using [colocation facilities]," he says.

Financial considerations may play the biggest role in colocation decisions. "Do you want to go to your board and ask for $50 million in capex [capital expenditures] for another data center?" Paschke asks. "The alternative is to go to a provider and use opex [operating expenses] and not have to spend money upfront."

Given the massive investments of time and money required to build a traditional data center, "fewer organizations are deciding to build their own satellite data centers," says Lynda Stadtmueller, a data center analyst at technology research company Frost & Sullivan.

In a trend that's especially prevalent among operations that use time-sensitive applications that require a local presence, more and more organizations are leasing space from a colo or hosting provider rather than building and managing their own data centers, she explains.

Outer Limits

Most organizations begin thinking about adding a data center as soon as their existing facility starts maxing out its physical space or support resources, Stadtmueller says. "Once you see you're beginning to run out of space, run out of server capacity, [or] when you're looking to add or upgrade an application, that's when you begin to look outside."

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