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      U.S. Colocation is Hot Right Now — Here’s Why


      The global data center market is expected to reach 58140 million USD[1] by 2026. In the U.S., colocation is hot, and—reflecting the global market—is expected to continue to grow over the next five years.

      Let’s take a closer look at why.

      COVID-19 Changed the Landscape

      The last 15 months have had a significant impact on the necessity for data storage, low latency and data processing. Streaming and social media companies that boast billions of users continue to grow and expand their colocation footprints. Increasing e-commerce sales have prompted retailers to more heavily in invest in IT infrastructure.

      Although we’re all weary of hearing about the impact of the COVID-19 pandemic, it’s undeniable that this event has affected how we work and live. Despite the strides we’ve made to return to normalcy, some things will be forever changed—colocation being one of those things. In INAP’s 2020 State of IT Infrastructure Management, the majority of respondents said the pandemic has changed their IT strategies, accelerating the move to the cloud or a colocation data center.

      Amid the pandemic, many enterprises downsized their commercial real estate footprints as their employees shifted to remote work. This downsizing included moving out of inefficient on-premise data centers that housed mission-critical, CAPEX-intensive infrastructure. Operations leaders have looked to colocation providers to find a new home for this infrastructure before considering establishing new on-premise facilities or refactoring applications for hyperscale models.

      The pandemic also underscored how the global economy is increasingly reliant on digital services. Even as some companies shift back to working in an office, we won’t see a rush back to an on-premise model. At least part of this has to do with network and data storage demands.

      Network and Data Storage Needs Aren’t Going Away

      There’s no instance where we’ll go back to a time where we’re using less storage and less network bandwidth. Remote work is more of a norm than ever before. Streaming is up and doesn’t show any sign of abating, especially considering that movies are being released to streaming services in addition to (or sometimes foregoing) a theatric release. Pair these with the Internet of Things (IoT), AI, Machine Learning, robotics and autonomous vehicles, and the demand for larger bandwidths and lightning-fast data processing has never been higher.

      Lower latency and faster network connectivity are a must. Colocation data centers fulfill this need for speed, allowing customers to choose data center facilities closer to their users, enhancing storage and networking services. The emergence of 5G will also boost the deployment of colocation services, giving colocation providers the opportunity to operate in remote locations.

      Enterprise Companies Don’t Want to Be Data Center Operators

      In addition to the acceleration of the move off-premise noted earlier, enterprise companies who previously built and ran their own data centers are realizing that they don’t want to be data center operators. The costs associated with owning and maintaining a data center are high. Studies show that owning or building a data center can cost over $300 USD per square foot.

      For SMBs, owning a data center is cost prohibitive. And while larger operations might be able to absorb these higher costs, owning and operating a data center is not an area of expertise for these companies. As such, they are starting to sell leasebacks of their facilities and are becoming tenants again in those buildings. Colocation in a third-party data center is the ideal route, saving on operational costs and on the time it takes to manage the data center itself, on top of managing the IT infrastructure it houses.

      This decline of the enterprise-owned data center is expected to drive market growth for the foreseeable future.

      INAP for Colocation

      Choosing the right provider for your colocation needs is the difference between settling for a new solution that merely beats your legacy solution or taking your infrastructure and applications to the next level as your build for the future.

      INAP Colocation provides highly secure and fully redundant data center operations, infrastructure and storage, all underpinned by our patented network route optimization technology. We are also located where enterprise and SMB companies need to be, with Tier 3 data centers in the Tier 1 key markets that offer the capacity to deliver on power up to 20kw racks. We have excellent network connectivity and a backbone to all the major cities. And, on top of high performance, we offer a spend portability program that allows you to swap your colocation investment dollar for dollar for a different INAP colocation facility, INAP Bare Metal Cloud or one of INAP’s other services.

      At INAP, we’ve seen first-hand the rising demand for colocation. Over the last 12 months, we’ve added 1.8 megawatts of capacity in our flagship Los Angeles data center to meet the needs of enterprise customers. These larger entities are looking to off-prem their storage and DR needs. Because of the demand, INAP will be completing another expansion in the coming months.

      Explore INAP Colocation.

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      [1] “Data Center Colocation Market Size To Reach USD 58140 Million By 2026 at a Cagr of 8.3% – Valuates Reports,” Cision PR Newswire, April 22, 2021

      Dan Beers


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      Choosing a Colocation Provider: Criteria and Questions to Find the Best Fit


      Whether you are new to colocation or have been colocating for years, it is exciting and stressful to choose your next provider. A colocation provider is not just another vendor in your business solution, but rather a strategic partner for your business’ critical infrastructure needs. The right colocation providers can take your data center footprint and network to the next level, while the wrong provider can prevent you from reaching your full potential, and worse yet, negatively impact application availability and performance

      To make the best-fit choice for your company, you’ll have to know your needs and goals and be able properly evaluate potential partners. Unsure of where to start? Read on for considerations and questions to get you on the right track.     

      Outline Criteria for Your Colocation Provider Search

      When choosing a colocation provider, it is important to reflect on your needs prior to starting your search. Be sure to include the following considerations in your decision making:

      Strategic Goals

      Am I looking for a strategic colocation partner to help me power, connect and cool equipment for my critical business process/revenue generator, project in development or anything in between? This is important to understanding the next decision point.

      Uptime

      Uptime is always important in your colocation decision. Is this a test system I don’t really care about, or a revenue generator that will lose revenue during downtime? With any revenue generating system it is important to determine your downtime costs per second, minute, hour, day and so on. This is where your strategic colocation partnership is so important.

      Is your colocation facility ready to provide you with unmatched uptime, support and advice to help you succeed? Have they even asked about your availability requirements? What are the provider’s SLAs and will they help you recoup financially in case of an outage caused by your colocation partner?

      Growth Potential

      Can your colocation partner accommodate your planned or unplanned growth in a timely manner? Nothing is worse than deploying a new application not expecting huge growth and realizing your colocation partner cannot accommodate your growth needs. This is what some call a “good problem to have,” but it’s still a problem. If you’re not able to quickly access more power, cooling and space, you can find yourself with a very dissatisfied consumer on the other end.

      Know Your Market

      Market/location is very important. Pricing could be great for power and cooling, but you may find yourself in a market with subpar interconnectivity, lack of diversity in connectivity providers or third parties and vendors in your vertical. Now your savings in cooling and power disappear with complicated connectivity solutions.

      Geographic market locations are also very important to your user base. Low latency connectivity from your end user to your product is one of the best ways to deliver a good application experience. Thus, choosing a colocation provider that can offer you not just power, cooling and space and low latency and great connectivity options is huge plus.

      Flexibility in Colo Design

      Flexibility in terms of colocation design for your specific solution is very important. Your solution may require caged environments with multiple security measures including cameras, bio-metric locks, privacy screening, slab-to-slap cage walls, toppers and a plethora of other power/cooling and cabling options to meet your exact needs. This is where the right colocation partner matters.

      Security Requirements

      Security that meets your requirements is a decision point which should be at the top of your list. Is your colocation partner PCI and SOC2 compliant? What other compliances will you need your partner to meet? What certifications does your colocation partner maintain on a regular basis?

      Cloud Options & Spend Portability

      Some of your application stack is likely already in the cloud or would benefit from running in a cloud, on bare metal or in a fully managed private cloud. Does your colocation provider also offer bare metal, cloud and connectivity to cloud providers? And if you choose to shift to one of these solutions from your current colocation solution, does your provider offer a spend portability program? The ability to cost-effectively pivot to a different solution to best meet shifting infrastructure needs is invaluable.

      Ask the Right Questions to Evaluate Potential Colocation Providers

       Now that you’ve thought more about your needs, you can more easily assess colocation providers to find one that meets your specific criteria. Based on the decision points discussed above, let’s talk through specific questions that should be considered when evaluating a potential colocation partnership.

      • What design is the colocation partner using for their power, cooling and space?
        • N+1, N+1 with concurrent maintainability, N+2?
        • What design is right for your solution?
        • Is the colocation partner keeping mechanical equipment on the datacenter floor or away from the floor?I have some stories about this one, but that’s for another blog.
        • How much uptime protection do you need? (Keeping in mind that all those pluses carry additional costs.)
      • What is your market/location?
        • Where is your customer geographically?
        • What markets does your colocation partner cover?
      • What power does your equipment require?
        • What amount of power do you need per cabinet? This will depend on your equipment, so knowing ahead of time what you will put in your cabinet is important. You may want to populate a cabinet with networking gear which doesn’t require much power, so the maximum you will need is 2KW to 10KW. Or you may use many blade chassis with huge power requirements and 20KW to 30KW per cab. If your colocation partner cannot deliver high-density power to your cabinets, now you are expanding your colocation footprint sideways rather than vertically and not utilizing all your available rack space.
      • What connectivity providers are available at the colocation space?
      • What internet service providers (ISPs) are available in the data center’s meet me room?
      • Does your colocation partner offer you a redundant IP blend?
      • Is your colocation partner able to directly connect you to public clouds?
      • Does your colocation partner also offer native bare metal or cloud services?
      • What security measures are taken by your colocation partner to make sure that only you will gain access to your cabinets and services?
      • Does your colocation partner offer you a comfortable, quiet place to focus, meet and get work done while at the datacenter?

      What Sets INAP Colocation Apart?

      INAP is not a cookie-cutter colocation partner. We’re extremely flexible with colocation design, effectively meeting the requirements of our customers no matter how simple or complex. And with INAP Interchange, our spend portability program, you can get the solution flexibility that you need after you deploy your initial solution. This allows you access to INAP Colo, Bare Metal and Cloud solutions to best meet your needs throughout INAP’s 47 Tier-3 data centers, including our flagship facilities in well-connected markets, along with 90 POPs around world.

      INAP’s ability to deliver a level of service with N+1 and Concurrent Maintainability for power and cooling provides you with peace of mind that even during maintenance, your critical infrastructure is backed by redundant systems. Paired with state of the art, zoned fire suppression systems with VESDA (Very Early Smoke Detector Apparatus), you can rest assured that your infrastructure is in good hands. Additionally, high-density power is INAP’s specialty, with efficiency that meets LEED Platinum levels. And you’ll find our security systems meet PCI and SOC2 compliance.

      Finally, what really sets INAP apart (other than what’s been covered above) is that all INAP facilities are staffed with tenured data center engineers and management staff ready to work directly with customers to help them succeed.

      Explore INAP Colocation.

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      Rob Lerner


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      Colocation Pricing Guide: Power, Space and Key Questions to Ask Your Provider


      Migration of infrastructure to colocation facilities will continue full force for the next few years, according to a survey put out to 500 IT professionals. Why? Because most on-prem data centers can’t compare to Tier 3-design facilities. The best colocation data centers offer high uptime, power efficiency and redundancy, as well as improve the physical security of infrastructure. With an enterprise colocation solution, companies also have access to greater networking capabilities and public cloud and/or other multi-platform solutions. This flexibility future-proofs your infrastructure for whatever needs may arise over time.

      Considering colocation as part of your infrastructure mix? Here’s our colo pricing guide to help you understand power, space and the key questions to ask your provider to decide the best fit for your company.

      What You Need to Know About Colocation Pricing

      Below, you’ll find the common types of billing for power, the spacing options you can choose from and two examples of how power and space are billed together.

      Start with Your Power Needs

      There are four standard ways to bill for power. When you’re working with your colocation provider, ensure they’re gathering your current and future power needs to appropriately size the power circuits. With that information in hand, they should work to offer you the best deal and least costly solution.

      There are four billing types for power:

      1. Per Circuit (Flat Rate) Power Billing

      The bill is a flat monthly fee per circuit provisioned for your solution and is the most common colo pricing structure. With this model, you have price predictability. You’ll pay the same amount whether you use five percent or 80 percent of your capacity. But be warned, there is no ability to burst above 80% of the delivered power without adding additional circuits.

      2. Power Capacity kW (Allocated kW) Billing

      In this model, you make a commitment to use a fixed amount of power (i.e.: 100kW), regardless of the electrical capacity of the circuits installed. Typically, you’ll see savings over flat rate model; however, the penalties for bursting above your committed rate can be quite steep.

      3. Metered Power (Usage Based) Billing

      Your bill will vary in this model. The monthly fee is based on actual usage and is determined on the present rate per kilowatt hour. Colocation providers typically only offer this pricing model on very large deployments and customers will still have to pay for space.

      4. All In Space & Power

      This is a simple calculation of the amount of space and power presented in a per kW number. It’s a very easy way for customers to compare pricing (assuming space and power delivered is equal). A con to this solution is that both the space and power are tied to a single rate per kW so there is a loss of flexibility.  If you ever need to upgrade just the power, you’ll end up paying more for the same amount of space.

      Explore Colocation Space Options

      Colo space is typically sold by:

      Cabinet: A single lockable cabinet on the data center floor. You can purchase contiguous cabinets if they are available in your chosen data center.

      Cage or Private Suite: An enclosed, lockable, segmented cage on the data center floor that provides superior flexibility and control without the capital investments that come with building and maintaining an enterprise-grade facility. A minimum of 5 racks/cabs is standard for cage deployments, assigned at 24 square feet per rack. Private data center suites, on the hand, are built to suit (complete with separate security access points) and are used typically for larger, wholesale colo deployments.

      Remember though, for some colocation pricing models, your bill may not have anything to do with square footage or rack usage. While cabinets or square feet are still required in order to allocate an area within the data center, the price is attached to the power that is being allocated for your use.

      Common Types of Colo Pricing Solutions

      Now that we understand the options for space and power billing, let’s explore how both aspects come together with two examples of popular billing models, relative to the deployment size. Work with your colocation provider to determine your best-fit solution.

      Cabinets with flat rate circuits

      For smaller deployments, typically one to four cabinets, colocation providers will deliver lockable cabinets, each with primary and redundant (optional) power feeds. A single power feed can deliver anywhere from 2kw – 17kw depending on the colocation provider’s power capacity and cooling capabilities. Your bill would consist of line items for the cabinet(s) and circuits delivered.

      Space/kw with Usage-based Power Pricing

      This solution is for larger deployments (100kw+), as providers will typically have minimums for this solution. You’ll be billed based on the number of square feet and a variable monthly fee based on actual power usage. This monthly fee is based on a preset dollar rate per kilowatt hour. Regardless of term, installs should be charged in this model.

      Typically, there is not much of a margin built into usage-based power. You should also expect install fees when adding more circuits.

      Beyond the Price Tag: What Can the Colocation Data Center You Choose Do for You?

      When you decide to move your infrastructure off-prem, there are many other economic and performance-based factors beyond the list price for space and power; however, they are just as important to consider and can even make or break your infrastructure strategy.

      Consider the following questions:

      1. Does the colo facility have Tier 3-attributes?

      To be a Tier 3-attribute data center, the facility must maintain N+1 fault tolerance, 72-hour protection from power outages and 99.982 percent uptime. Concurrent maintainability also ensures that a single critical component failure—electrical, cooling, power, etc.— will not disrupt service because of the redundant systems in place. How does the data center you are considering stack up?

      2. Does the colo provider offer multi-platform contract flexibility?

      Infrastructure needs can change fast. Make sure your provider gives you flexibility through implementation of different platforms (cloud, bare metal, etc.), as well as spend portability after you deploy so that you can switch up your infrastructure solutions to stay agile and keep pace with you company’s goals and workloads.

      3. Does the colo provider support High Power Density environments?

      With a high-power density configuration, you can fit more gear into a smaller space and reduce your overall footprint. This becomes especially important if you’re looking to deploy any type of hyper-converged solution.

      4. Can I get high-performance, low-latency bandwidth?

      Bandwidth is an essential cost that you cannot overlook when sourcing any data center or cloud solution. If you’re powering any mission-critical applications with your colocation deployment, look for a colocation data center that has quality blend of ISPs and inquire about latency averages.

      5. Does the colo provider offer interconnectivity solutions?

      Ideally, you’ll want a provider who offers a high-capacity private network that allows you to connect across various data centers throughout the country or around the globe. If your colo provider lacks interconnectivity solutions, you’ll need to partner with other vendors for interconnectivity options, which can be a future pain point.

      6. Does your provider offer geographically dispersed data centers for disaster recovery?

      Ultimately, you may require some sort of secondary site for any disaster recovery solution as part of your overall business continuity plan. Look for a provider that either has multiple sites across the a geographically dispersed area or some sort of off-site DRaaS product that works for your company.

      7. What about onsite support?

      Onsite expert support technicians can keep your infrastructure online, secure and always operating at peak efficiency when your own IT staff is unable to. Make sure your colo provider offers remote hands support and don’t leave it out of your colo budgetary considerations. You’ll also want to ensure that your data is protected by 24/7/365 onsite security/personnel.

      For more information on colocation pricing, or to find the best solution for you, chat now.

      Explore INAP Colocation.

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      Jeff Bettencourt
      • Director, Solution Engineering


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