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Four Keys To Colocation Success
Economics are critical in any colocation transaction. But do you know how infrastructure rental rates, support SLAs, and power costs apply to the total project cost?

By David Liggitt · 7/28/2015

Economics are critical in any colocation transaction. Success requires an understanding of how infrastructure rental rates and power costs apply to the total project cost. In the past few years, increased competition and design efficiencies have contributed to better pricing opportunities for users. Today it's not uncommon for a transaction to have one provider focused on winning the deal on economics alone.

While economics should be thoroughly analyzed, other key factors must be considered to ensure the right provider is selected. For example, an operator offering the lowest price per kW/month might not provide connectivity or support options appropriate for your company's overall business needs. Therefore, it's short sighted to consider colocation as a commodity and make a decision solely on price.

So consider these four ideas to ensure success in your company's next colocation pursuit:

  1. Build an Enduring Partnership – Even though colocation contracts have shortened over time, data center users typically remain with their provider far past the contract expiration date. Make sure your chosen operator is a company you are proud to do business with today and in the future.
  2. Evaluate Experience – Data center construction and operation requires capital and expertise. Finding a provider experienced in managing solutions for your industry vertical and requirement size is important. Data center operators with a history of success will gladly provide references.
  3. Plan for Scale – If expanding into domestic or international markets could be a possibility in the future, then choose a data center provider that meets those needs. Data center operators in multiple markets are more aggressive with pricing when additional markets are considered. Even when your provider doesn't currently have a presence in a desired market, they often can partner with another provider to make sure you're covered.
  4. Know What Services Are Offered – While managed or cloud services might not be part of your company's strategy now, they could be in the future. Consider data center providers that offer these services today so you're set for growth tomorrow.

There is more to colocation than price, and your focus on the long-term attributes of a colocation partner will benefit your company for years to come.

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