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Is Colocaton Right For You?

Certainly, there are benefits to colocation - physically locating your IT equipment (servers, switches, etc.) at a data center. By leveraging their facilities, you can save on capital expenditures, streamlining your budget.

In today's marketplace, the effective management of capital is paramount to operating a viable business. Data is king. It grows exponentially with time. How do you justify the expense to build out new infrastructure or expand on existing infrastructure? What is the projected Return on your Investment (ROI)? Could that new infrastructure become obsolete with the advent of dynamic change in technology, or shifting organizational strategies - or a relocation of your business?

What are the major costs related to maintaining your own data center?

Surely, your IT budget will command much of the expense for facilities management, but the cost of cooling and power are quickly gaining ground, as power costs escalate. How do you equate power now in your IT budget? Colocation could provide transparency to your data center expense, allowing your IT budget to more accurately reflect its overhead and power expense.

Colocation Responsibilities - You and Your Host

Colocation clients purchase, manage and maintain their own equipment, including servers, switches, etc. Your host provides the facility, cabinet space, redundant power, BGP bandwidth, climate controlled environment and security. The amount of cabinet space you require will depend on how many racks you'll need. Each rack typically houses 42U of rack space, where 1U of space equates to 1.75 inches in height.

Power

The majority of entry level and mid-range servers are configured with 120v plugs even though by design they will work with 120 or 208v. Larger towers and rack mounted servers tend to be configured with 208v.

Most data centers can customize your power requirements to 30Amp circuits, as well.

Hosted already?

There exist huge differences in power costs between data centers in LA, NY, Chicago, St. Louis and others. The cost of power contributes heavily to the liability side of your balance sheet. Power costs through some data centers are significantly less expensive, as much as half in some instances. If your cost was cut in half, let's say from $20,000.00 to $10,000.00 monthly, would it matter if your servers were colocated in Los Angeles or St. Louis? These types of savings should surely make moving much more attractive!

The trend

We're already seeing more and more relocations and outsourced applications, primarilyto reduce power expenses. During the next five years, it's projected that one in four businesses will experience a significant business interuption. Couple that with the explosive growth of data. 161 Exabytes of data were created in 2006, which is approximately three million times the information of all the books ever written.

Look for power capacity

For example: 1600Amp service @480 served through redundant feeds protected by a pair of redundant 150kVA UPSs and a 1500 kW generator.

Cooling

Power consumption is directly related to the amount of heat dissipated into a data center. The level of heat expelled per rack has increased with new technologies, like quad core processors. How warm are your servers running now? Heat is definitely their enemy! Colocating that infrastructure into a data center's climate controlled environment will minimize the risk of compromising your ability to deliver mission critical applications.

Look for cooling specifications

For example: This data center is cooled by four Liebert 20 ton downflow CRAC units which are on a Glycol cooling loop with 200 tons of capacity.

Security

How safe is your data today? Does your cleaning lady have access to your server room? Is your credit card terminal in the same room as your servers? Do you even have a door to your server room? If you do, is there controlled access? Does your level of security meet your operational requirements? Can your business model support your current requirements? Is your current growth sustainable? If you're hosted elsewhere now, do you really need biometrix hand scans and security guards posted behind bullet proof glass?

Security is of the utmost importance at a data center. Expect closed circuit video surveillance systems to monitor every entry point into their facilities.

Bandwidth

How much bandwidth do you have at your business today? A T-1 at 1.54Mbps? Possibly two - load balanced? Or an ePort at 10Mbps? If at a data center now, what level of uplink ports are available? Conversely, how much bandwidth is typically available at data centers and at what cost? Most data centers have multiple Tier 1 carrier connections on a BGP network with 10, 100Mbps and GigE uplink ports to provide flexibility, ensuring traffic is routed for redundancy (to protect against a single switch or router failure) and maximum network performance. Most also facilitate cross connects to carriers of choice for individual or legacy network requirements.

Costs for bandwidth are typically customized to fit your requirements.

Bandwidth isn't as straight-forward as you may think. For some it is the total amount of data, typically measured in Megabytes, Gigabytes or Terabytes, that may be downloaded or uploaded during a given month - also referred to as data transfer.

Straight data fees

If you use 10MB, you pay for 10MB. If you use 20GB, you pay for 20GB. Typical bandwidth plans are based on metered, unmetered, burstable and 95th percentile billing.

Unmetered bandwidth

Unmetered bandwidth means that the maximum data transfer rate is capped at a specific speed, but the amount of data transfer at that speed is unlimited. The cost for unmetered bandwidth is based on a fixed monthly charge for bandwidth consumption payable at the beginning of a monthly cycle.

There are dedicated and shared unmetered bandwidth plans.

Dedicated or guaranteed unmetered plans offer bandwidth pipes available to you and you only, that you can max out at will. Most offer burst options for overages on a 95th percentile.

Shared unmetered plans means your host shares your pipe with other customers. These types of plans typically provide a guaranteed minimum but not a guaranteed maximum.

When operating at a speed of 1.54Mbps, a VPS is capable of a maximum 30 day transfer total of (1.54 Megabits per second / 8 bits per byte = .1925 Megabytes per second * 60 seconds = 11.55 Megabytes per minute * 60 minutes = 693 Megabytes per hour * 24 hours = 16,632 Megabytes per day * 30 days = 498,960 Megabytes per month / 1024 bytes = 487 Gigabytes per month. If your requirements exceed 487GB monthly, upgrade plans are normally available.

A 10mbps connection equates to about 3.3 Terabytes of bandwidth and 100Mbps to about 33.3 Terabytes.

Metered plans

The expense for metered bandwidth is calculated at the end of each monthly billing cycle. Metered essentially means your bandwidth usage is monitored and you're responsible for any overages.

Small servers with low bandwidth usage are normally billed at a straight data transfer rate.

What is the 95th Percentile?

Another bandwidth plan uses the 95th percentile method for computing bandwidth expense. For example, a 10Mbps plan billed at the 95th relates to 10Mbps unmetered but the connection itself may be capable of 100Mbps. This enables your server to reach speeds up to 100Mbps (burstable). At the end of the monthly billing cycle, the top 5% of the speeds are removed, then the 10Mbps is subtracted, leaving any overages. In this case, if your server used 15Mbps over 95% monthly, you would incur an additional bandwidth expense of 5Mbps.

Consistent traffic with a couple days of bursting results in far less bandwidth expense than, let's say 10 days of bursting each month. The difference can be as high as ten times more.

Colocation Pros:

If you're in close geographical proximity to your host data center, you can work on your own equipment (upgrades, etc.) avoiding the cost of outsourced parts and labor.

As you grow, savings from colocation grow as well.

As a rule, it's generally less expensive when compared to unmanaged dedicated.

Your fixed assets show on your balance sheet, indicating higher net worth (important to banks and potential customers).

If you're using accrual accounting, you'll be able to show profitability on your income statement by spreading expenses over three to five years (depreciation).

About the Author

Steve is the author of the Hostirian Blog. He offers a personal depth and breadth insight into the complex world of web hosting and colocation.

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