The great co-location debate

SMBs should evaluate their needs and consider that, while co-location is a viable solution, the move to service infrastructure is on the rise

With cloud computing growing in popularity, SMBs are questioning whether it is more practical to co-locate their data centers or completely bypass that option and head into the cloud? First, let's briefly clarify the two:

Data center co-location: Typically provided as a commercial service, this option allows SMBs to rent data center space from a third party facility that provides necessary pipe (network connectivity to the Internet) and ping (network response). Space is usually leased as individual rack units, cabinets, cages, suites, rooms and facilities

Cloud computing: By moving to the 'cloud,' SMBs have the ability to store and process data over the Internet. For clarity, Gartner defines cloud computing as "a style of computing where scalable and elastic IT capabilities are provided as a service to multiple customers using Internet technologies"

Co-location addresses data center facilities needs. Cloud computing includes IT infrastructure as well as data center facilities, all delivered as a service. Both options provide network and cost-saving benefits, and SMBs can benefit greatly from either solution.

Data center co-location provides SMBs with the opportunity to house dedicated computing infrastructure (servers, network devices) instead of building a data room or data center, allowing them to save money on costly facilities infrastructure and maintenance. On-site data centers can require high overhead investments which are often difficult to justify.

Co-location offers SMBs customizable services to ensure they are getting exactly what they need. In turn, networks, bandwidth, redundancy and connectivity become less expensive and are often more reliable than on-site, owner-operated facilities. Data Center co-location also allows businesses to free up internal networks and increase Web access speed, and the reduced power consumption saves money. Additionally, many co-location facilities are moving toward green power sources such as solar or wind to offset the carbon impact of their energy use.

Many co-location providers also offer additional technical support, which is beneficial to smaller businesses that may not have the budget to employ experts to address challenging IT issues. However, it is important to understand the limitations noted in the service-level agreement, such as the availability of the provider's support team. While some co-location providers offer around the clock support, others do not. If that is the case, work with the provider to obtain off-hour access to the facility and have a back-up plan in place.

The data center co-location marketplace operates under boom or bust economics. In 2001-2003, data center space became a commodity, leading to increased expansion. Looking ahead, it is difficult to determine whether there are enough data centers to meet the growing demand. Much like other types of real estate, there are cycles, so if you expect your business to grow, plan ahead. Choose a provider that has high speed connectivity to another facility and has an expansion plan in place. Contracts vary, so be sure to find the one that is best suited for the unique needs of your company.

On the other side of the debate, cloud services not only include the facility savings of co-location, they also deliver computing, storage, backup and additional infrastructure as a service. The ability to compute in the cloud is not location specific -- SMBs are not tied to a specific device or piece of hardware. Instead, the Internet acts as a new 'facility' which provides access to the various services. Additionally, the cloud is much more flexible. With a click of a mouse, scalable resources and support are available to meet business needs around the clock.

The cloud also offers "pay as you go" pricing structures, which make it simple for SMBs to grow or change their computing and storage needs. According to Forrester, cloud services can enable businesses to pay between $70 and $150 per month for a fully-utilized server, versus the average $400 a month that it costs an enterprise to run a server in house. These cost-saving benefits can be realized today to help SMBs prepare for future expansion. Through the cloud, SMBs can expand resources immediately and prepare for IT advancements that they might otherwise do without.

While security is a forefront concern, properly implemented cloud computing does not entail any more security risks than traditional computing. With effective data security in place, cloud computing is a safe, reliable way to outsource data. However, because it is a newer technology and an innovative way of delivering IT services, SMBs are reliant on the cloud vendors' security capabilities. The cloud is all about network and systems security, as opposed to co-location centers which are focused primarily on physical security.

One noteworthy concern surrounding cloud computing is shared data. While cloud computing provides added freedom, it is important to understand that data is moving onto a shared resource. That become especially important buyers change providers. Will a little "data footprint" be left behind? Additionally, because resources are accessed over the internet, you do not have complete control of the end-user's ability to reach those assets. It is important for SMBs to consider their capabilities before moving data to the cloud.

While cloud computing is still in its very early stages, its benefits continue to evolve while the challenges continue to diminish. SMBs should consider the multitude of cost-savings cloud computing will provide in the future as well as today.

Best PracticesAt the end of the debate, no matter what side you take, there are some best practices across the board that every SMB should consider before outsourcing a data center:

Practice due diligence: Obviously either approach requires a lot of homework. If the services sound too good to be true, they probably are. World class facilities and providers are available -- use them.

Define your needs: What is most important to your company? Security, service, room for growth, contract flexibility? Find out what benefits are a part of these services and understand the limitations. Where the cloud may have more flexibility, co-location may offer more customized security features. Generate a list of objectives prior to moving any data.

Investigate financial health: Do you need to worry about losing access if your provider locks the doors? We can't say it enough -- do your homework. While someone else might offer a better deal, remember the reliability that comes along with seasoned providers.

Server huggers beware: Experiencing empty nest syndrome? It is understandable to experience some apprehension both before and after moving mission-critical data and applications, but SMBs should not worry. By taking the necessary precautions, both the cloud and co-location options are secure and reliable alternatives. Plus, both come with cost-saving benefits that directly impact the bottom line

SMBs should evaluate their needs and consider that, while co-location is a viable solution, the move to service infrastructure is on the rise. Seize the opportunities available and consider that, over the long-term, the cloud tends to be more wallet friendly because providers can deliver services at a price point that best makes sense for small businesses.

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1 Comment

Andie MacKinnan

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Choosing a location for your computing power can greatly effect energy consumption and costs. Siting is definitely one of the most important factors that affect the energy consumption of a server farm. There are places with cooler climates than in the continental US and with more green electricity available. I would recommend anybody considering siting a datacenter to take a look at the Finnish website on these issues: http://www.fincloud.freehostingcloud.com/

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