Financial Advantages of Colocation

Colocation can have a bad reputation for being too expensive without enough return. Business owners don’t want to invest in something that may cost more money than it’s worth, decreasing the value of their company. However, entrepreneurs who are hoping to create a solid presence in the online world may actually benefit from colocation in numerous ways. If business owners are looking to expand and grow, having control over their enterprise, then colocation can help add value to their company and be the better financial choice over other hosting providers.

The recession at the end of 2009 played a large part in colocation popularity. With the market on shaky ground and money tight everywhere, it wasn’t making sense for business owners to invest in building, owning, and operating data centers. Though the “Great Recession” finally came to an end, market values are still too unpredictable to make investments like that worthwhile. Colocation facilities take the guesswork out of this and operate on a monthly fee that business owners can easily budget for.

Taking Care of Business

The way businesses are run has also changed since the recession. A large focus of Chief Information Officers (CIOs) used to be on the best ways to entice new clients and ways to improve business processes. Industry analyst Gartner Inc. has revealed that in 2014, the goals of CIOs included growing the business and improving how to conduct its operations. Much of this is based in how finances are distributed within the business.

If you do decide to own a data center, there are three areas that will be a main focus for your finances: facilities, people, and downtime. The facilities include the building itself and everything that makes it run smoothly. The capital needed to get it built, mortgage, daily maintenance and security, new equipment and space to offer clients, and so forth. These costs all come out of the owner’s pocket, and they are not low in price. Data centers come with employees to keep it in operation. From janitors to IT staff, everyone will be requiring payment, another of the owner’s responsibilities.

A Solid Service

Downtime could be what eats the most money in any business facility. It’s extremely important to know what your facility’s risk of downtime looks like and how it will affect you financially, giving you a better idea of your “true cost” for owning your own data center. Downtime is hard to prevent, and just adds stress and additional financial burden to owners.

Colocation helps alleviate the financial burden of business owners while their company thrives. Those three factors that require constant financial monitoring are no longer a concern. The money that would go towards the mortgage and salaries can instead be put towards upgrading investments and company expansions. You still have the benefit of security, IT staff, 24-hour access to your space, and other perks without being financially responsible for any of it. Instead, the three main things that business owners pay monthly for are floor space, power, and bandwidth. Some providers also offer additional services and such as monitoring and “remote hands” for a small additional fee. Using colocation creates economical, low-risk solutions for an organization to achieve its goals.

Outsourcing Done Right

If a business owner decides to use a colocation provider to house its equipment, the CIO can transfer some of the company’s IT infrastructure to that location, providing a different power grid and road access. If for some reason the power goes out at the company’s headquarters, business is still able to generate revenue through its working equipment at the colocation facility. IT technicians on staff would be able to assist with anything to coax more power out of the business’s remaining equipment. Owning a data center would house all of the company’s equipment, leaving little chance that the online presence comes to a complete halt if power issues occur.

Some of the best colocation providers allow their clients to decide which network carriers will work best for their business needs. Clients aren’t locked in, but instead a market environment is created where they can buy bandwidth. If a carrier experiences an outage, the provider has other networks available to provide Internet connectivity, thus ensuring the client’s company doesn’t lose business by not being online.

There are so many great reasons why using a colocation provider is a financially sound decision for your company. They provide the same, if not better, service, access, and location for a fraction of the cost, with much less stress and fewer headaches. Colocation is on the rise and will continue to put for the best service for businesses at a better cost.

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