By: John Shepler
Businesses struggling to find enough bandwidth might be overlooking a simpler solution. Instead of waiting for carriers to come to them, companies can benefit by going where the carriers already are.
Colocation Centers: A Hub for Connectivity
Carriers are drawn to locations called colocation centers, or colos, and carrier hotels. These large data centers are designed to accommodate multiple tenants, unlike typical data centers that serve a single company. In fact, most companies avoid renting out space in their data centers due to security concerns.
The Need for Colocation Centers
Colocation centers exist because of economies of scale. Imagine 100 companies, each requiring its own data center. They could each build their own facilities with climate control, security, fire protection, and backup power. However, this approach is expensive and resource-intensive.
Data Center Expenses
Building and operating a data center is expensive. Beyond the initial investment, there are ongoing costs for electricity, cooling, and staff. These expenses persist regardless of usage, and equipment may sit idle for a significant portion of the day. Smaller companies often struggle to justify the cost of round-the-clock technical support.
The Importance of Connectivity
Bandwidth availability and cost depend heavily on location. Businesses in smaller towns or rural areas may face limited choices and high prices.
Leveraging Economies of Scale
Now, imagine those 100 companies sharing a single, larger data center. While it seems like the total cost would be similar, it’s actually much lower due to economies of scale.
Each company only needs enough space for its servers and equipment. Fewer, larger backup generators can provide emergency power, and shared security and technical support teams reduce overall expenses.
From Owning to Renting
Instead of owning and maintaining their own data centers, tenant companies adopt a rental model. This provides flexibility, allowing them to easily adjust their rented space as needed. The colo operator takes on the responsibilities of building maintenance, utilities, security, and technical support.
Attracting Carriers
Carriers often hesitate to extend fiber optic service to individual businesses due to high construction costs. However, colo centers act as carrier magnets. With the potential of serving numerous customers in one location, carriers are more willing to invest in providing high-bandwidth services.
Colos are typically situated near populated areas, further simplifying construction. This abundance of carriers fosters competition, leading to more attractive pricing compared to individual business connections.
The “Meet Me” Room
Colos feature a dedicated space called the “meet me” room (MMR) for establishing cross-connections. The colo operator connects each tenant’s racks to the MMR using copper or fiber cabling. Carriers also have their connections running to the MMR.
When a tenant needs bandwidth, the colo establishes a connection to the chosen carrier within the MMR. This setup eliminates the “local loop” charge, as the colo provides the “last mile” connection.
Different Types of Colos
Two main types of colos exist. Carrier-operated colos are built by a single carrier for their own use, with excess space rented out. These offer high bandwidth and competitive pricing but limited carrier choices.
Carrier-neutral colos are operated by third parties who don’t favor specific carriers or customers. This provides tenants with the freedom to choose from multiple carriers and services.
Clouds and Colos
Cloud services are frequently hosted within colocation facilities. This provides cloud providers with the necessary infrastructure to support their extensive server and storage needs. Colocation within the same facility allows for easy connections to cloud providers.
If your business faces high data center costs or struggles to secure adequate bandwidth, exploring colocation centers and cloud service providers could be beneficial.
