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How To Choose Colocation Services And Reduce Your Operational Costs

How To Choose Colocation Services And Reduce Your Operational Costs

Colocation services have become extremely popular for many good reasons. To get the most out of them, however, you need to choose colocation services that meet your business’ needs and wants both now and in the future. That way, you can be confident that your colocation service will reduce operational costs, not increase them. Here is a brief guide to help.

How to choose colocation services to reduce operational costs

Here are the 10 key factors to consider so you effectively choose colocation services to reduce operational costs.


Location heavily influences the cost of real estate. This in turn heavily influences the cost of running colocation facilities and hence the prices charged for colocation services. In principle, therefore, one of the easiest ways to reduce operational costs is to choose colocation services in more affordable areas. In practice, it’s vital to ensure that this approach does not excessively impact the quality of the service you can deliver.

Security and compliance

All reputable colocation vendors implement robust physical and digital security. Many colocation vendors also support recognized security frameworks (e.g. ISO27001) and mainstream compliance programs (e.g. PCI/DSS). Some colocation providers also support more niche compliance programs (e.g. FISMA). Choosing a colocation service that can handle most of your security and compliance needs is both convenient and cost-effective.

Service level agreements and support

You cannot compromise on a robust, contractually enforceable uptime guarantee no matter how much it might reduce your operational costs. You can, however, potentially look to make savings in other service areas. You could also check to see if a more basic support package could be adequate for your needs. This could always be boosted with occasional ad-hoc support if necessary.

Cost and cost structure

Headline price is obviously a key factor in any purchase decision. When you choose colocation services, it’s advisable to assess the upfront and ongoing costs separately. This will show you not just the total cost of ownership but also the impact on your cash flow. In addition to knowing the headline price, however, you also need to be clear on the cost structure. Again, this can have a significant impact on your cash flow.

Scalability and customizability

In brief, you need to be sure that the colocation facility has enough support for both scalability and customizability to fulfill your needs over the long term. This enables you to get the maximum return on the investment you make when you migrate to a new colocation facility. At the same time, it may not be worth paying for levels of scalability and/or customizability that are clearly in excess of what you are likely to need.

Support for emerging technologies

It’s advisable to choose colocation services that are quick to implement support for emerging technologies. For example, right now many businesses are very interested in artificial intelligence (AI), machine learning (ML), and/or 5G. These all require specialist infrastructure. Over the course of the future, new technologies will emerge and it may be very reassuring to know that your colocation vendor will be quick to adapt to them.

Integration with public clouds

Being able to integrate with public clouds vastly increases clients’ options for both scalability and customizability. As a result, it can significantly reduce operational costs. If you choose colocation services with multicloud support, you will widen your options even further.

Integration with edge computing

Edge computing has emerged as one of the most exciting (and useful) technological developments for many years (arguably since the development of cloud computing). The rollout of 5G is creating even more applications for it. Even if you’re not using it yet, edge computing is likely to play a key role in enabling businesses to reduce operational costs. It’s therefore highly advisable to choose colocation services that support it.

Energy-efficient technologies

Together with real-estate costs, energy costs are one of the most significant factors in the costs of running a colocation facility and, hence, the prices charged by colocation vendors. That means choosing colocation services that have implemented energy-efficient technologies can noticeably reduce operational costs. It can also help to make your operations more sustainable.

Green colocation options

Colocation services with green colocation options can actually be particularly cost-effective options. There are two main reasons for this. Firstly, green colocation services do their utmost to minimize their use of resources (especially electricity and power). Secondly, they try to use as much renewable energy and recycled water as possible. In particular, they try to generate their own energy from renewables and recycle their own water.

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