The Colocation Paradox - A Hybrid Colocation Story

Client: "I want to move from dedicated servers to colocation."

Account Manager: "No problem at all, your contract is ending in a few months, we can arrange a quote for colocation. We can discuss hardware decommissioning and migrating the solution and the data."

Client: "Okay, about that, would it be possible to just colocate the infrastructure it is already on?"

Account Manager: "Theoretically, we could sell the servers to you but they are two years old now so it would be old infrastructure."

Client: "That's fine, I just can't face a migration!"

Account Manager: "Okay, I fully understand that and we can arrange a quote for that. I see on record here that you take advanced  monitoring services but receive the standard basic technical support package - I assume you have a few technical people for coverage?"

Client: "We have a local administrator who does the basic work, he can cover the basic tasks but no one for out of hours. It should be fine, thing's don't normally go wrong anyway."

Account Manager: "Agreed, servers are reliable but as they age components do fail. Additionally, your office is based in Liverpool it would take a few hours to reach London and replace the hardware with your spares."

Client: "Yeah, we need spares, we can hold stock of disks I guess. However, we can use Coreix remote hands, right? There are options for that on your website, we checked this as part of our due diligence. Also, you guys have spares on site right?"

Account Manager: "We do and I can arrange a quote for remote hands. I will supply some example pricing for hardware replacements as well. So have you thought about networking requirements?"

The majority of clients stop at this point and start adding costs up in their heads. Colocation is not for everyone. The argument makes sense in the mind of a customer striving to make their IT infrastructure cost-effective.

One use case for colocation is specifically for clients that already operate their own infrastructure or already have significant on-premise infrastructure that cannot be virtualised or cannot go into the public domain, however, they want to benefit from housing their hardware in a datacentre environment with all the benefits associated.

For older and more established businesses that need a transitional migration from on-premise into a datacentre environment, colocation is a handy stepping stone or, in some cases a good permanent solution. 

As a new business, why would I colocate servers when I can just utilise cloud infrastructure? Unless your business model requires a large technically competent staff base and mass funding for large capital expenditure on hardware, I feel it is the wrong solution in many cases.

Dedicated servers and cloud solutions offer a minimal capital expenditure model and with the correct support, packages can reduce your business operational expenditure overall.

So colocation is end-of-life?

No, not at all, we find that clients frequently take hybrid services. This may include some public cloud services, a quarter cabinet of colocation for existing servers from their office and a leased line for connectivity back to the headquarters. All the services can be hosted in the datacentre and meet the clients' requirements.

In the same way that colocation isn't dead, neither are bare-metal dedicated servers. You need to use what works for your individual scenario, this is one of the reasons why we focus on consultation, it helps clients identify true requirements.

So should I move from dedicated servers to colocation?

This is not a black and white question, but it is relatively easily calculated. Take your total fully managed dedicated server bill over 3 years.

Now calculate the cost to purchase infrastructure plus spares (3-year life), in addition to colocation, power and transit costs over 3 years in addition to any support requirements.

These figures give you a simplified TCO (total cost of ownership) of each service - It is up to you to decide which is more effective for your situation.