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January 16, 2018
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Data Center Connectivity Cost Savings
Two types of bandwidth costs you might reduce by considering a move to a colocation center.

By: John Shepler

If you are considering a move to a colo center or setting up an off-site data center or private cloud for your company, you’ll have some challenges and opportunities for connectivity arrangements. Let’s see what to consider and where those cost savings opportunities are.

On-Campus vs Remote Bandwidth
The difference between on-campus and remote data centers, including colocation facilities, is the contrast between local wiring where you have complete control of the network versus leasing network connections through service providers. Chances are that you have a relationship with a bandwidth provider now for dedicated Internet access and private lines to other company facilities. You’ll simply be expanding that relationship with your current or other competitive service providers.

Data Center Bandwidth Needs
There are two types of connectivity to be concerned about for data center bandwidth, not counting the local wiring interconnecting your equipment in the racks. That local wiring is the same as you would have if the servers, disks and network appliances were located down the hall instead of across town or in another state. The other connections you need are from your equipment racks to the outside world and from your existing facilities to the colo center.

WAN Bandwidth Opportunities
The largest bandwidth consumption will likely be WAN bandwidth connected to your servers at the data center. This is one of the biggest advantages to relocating off-site. Colocation facilities are attractive to carriers, who establish network points of presence within the facility to serve all of the businesses collocating there. Not just one carrier, either. There’s just too much business to be had concentrated within the walls of the colo. Several, if not many, carriers will set up shop in the colo and try to garner as much WAN bandwidth business as they can. That’s why colocation centers are often called “carrier hotels.”

Competition Lowers Prices
The advantage to you is that there are multiple providers all vying for your business. Since you are typically all located within a single building, there are no issues regarding construction of lines. The lines are a few hundred meters at most running from a carrier’s equipment to yours through colo provided conduit. Both copper and fiber are readily available. In fact, the colo center may provide the connections themselves to keep everything standardized.

Why Colos Have Lower Bandwidth Pricing
As you might suspect, the ease of connection and competing carriers makes for excellent prices on bandwidth. You’ll likely find better prices per Mbps or Gbps in the colo center than you will for the lines connecting your current facility. That’s a major strategic advantage for colo providers. You want to move your high traffic equipment, especially any services provided via the Internet, to the colo.

Bandwidth Cost Tradeoffs
There is a bandwidth tradeoff involved. Since your servers are now located remotely, you’ll need bandwidth to communicate with them. The trade generally works out that the bandwidth needed toconnect employees to operate the collocated equipment is less than the bandwidth needed to connect all users, including customers, to that same equipment. If colocation makes sense for your operation, there should be a net savings on your telecom services expenses overall. If not, that savings needs to come from reduced capital expenditures, facilities operation and maintenance, power and HVAC, and staffing. Sometimes you can save in all these areas throughcolocation.

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