Colocation datacenters: A viable option for today’s enterprises

By Nilesh Rane, Associate Vice President - Products & Services, Netmagic Solutions
Nilesh Rane,  Associate Vice President - Products & Services, Netmagic Solutions

Nilesh Rane, Associate Vice President – Products & Services, Netmagic Solutions

The business environment today is in a state of constant disruption. Business requirements of enterprises are rapidly changing as they try to adjust to the changes in the environment. Though many enterprises would like to have a control over their IT infrastructure but the expense of managing and setting up in-house facilities is huge. At the same time, outsourcing the IT infrastructure has its own share of concerns with security and control of data and assets and adherence to regulatory compliance being the most important.

In a new era of computing that is increasingly defined by major trends such as virtualization, cloud services, mobility, big data, and social media, colocation stands out as the most viable option for most business enterprises trying to relook at their IT infrastructures. Colocation helps business enterprises to increase agility, save money, reduce power consumption, improve uptime, eliminate management complexity, and simplify adherence to regulatory compliance requirements.
Drivers for Colocation
The increase in number of business enterprises opting for cloud services and virtualization as a part of their IT setups is driving the need for more datacenter services. According to Gartner, India will be the second largest market for datacenter infrastructure and the second fastest growing market in Asia-Pacific in 2015. Indian enterprises will be focusing on building intelligent datacenters that focus on optimizing existing hardware assets by using additional software capabilities. This will drive increased attention on newer trends such as public cloud, datacenter consolidation, colocation and integrated systems.

With the “build vs. buy” debate still going strong in IT infrastructure circles in India, questions being asked by business enterprises as they assess their existing in-house datacenters are:
• Should we endure a datacenter construction project that can stretch over months or years?
• Should we consolidate resources into your own datacenters, even if floor space is shrinking fast?
• Can we provide the redundant datacenter and network resources necessary to support 24x7x365 operations?
• Can we meet the security requirements needed for data protection and compliance?
• Is owning and operating a datacenter a strategic differentiator for my company?
• What is my organization’s risk tolerance and culture?
• Does my organization have the capacity to forecast and plan effectively?
• What is my cost of capital? Does the business favor operational expenses or capital expenses?

The answer lies in looking at colocation as a viable option for enterprises who are seeking alternative solutions to address their business and IT needs. Advantages with colocation are many – Colocation enables a business enterprise to increase agility, save money, reduce power consumption, improve uptime, eliminate management complexity, and simplify adherence to regulatory compliance requirements.
How does Colocation Enable Business Enterprises to Stay Ahead?
For most organizations in India, colocation makes more economic sense than building a traditional facility. According to a research report by Forrester – ‘Build or Colocate? The ROI of datacenter facilities in India’ – the NPV over 15 years of building and managing a traditional datacenter in India jumps to $56 mn, while colocation is $30.5 mn.

Cost Control
Colocation can provide opportunities to consolidate data centers, take advantage of monthly fee structures and other ways to drive down the costs of computing.

Building vs. Outsourcing
With capital costs under close scrutiny, building a whole new datacenter to keep up with growth may not be an option. With the unpredictable nature of business, you may provision an entire new datacenter to suit your needs today, only to have it sit idle a few months later as needs change and demands lessen.

Colocation provides a turnkey solution and a more economical alternative. Instead of investing in another datacenter of your own, you lease space in a provider’s datacenter facility for a monthly fee. You maintain ownership and control over your systems, but you’re freed from paying for the facility itself, and the costs of powering, cooling and securing it.

Consolidating with Colocation
To decrease hardware, energy, staff and operating costs, business enterprises are looking to reduce their datacenter footprints by consolidating their facilities. Datacenter congestion can result, leading to power, heating and cooling issues that cause performance problems.

Colocating equipment in a provider’s datacenter facility can reduce these risks, while eliminating crowded floor space and internal consolidation headaches. Further, you can divert funds that would have been used for facility construction into refreshing technology assets, replacing aging hardware with more cost- and energy-efficient technology, such as high-density racks and blade servers that pack more processing power into less space.

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