As the data storage and software requirements of businesses increase, the temptation to install or upgrade your own servers grows. Yet the administrative and cost burdens that come with this can be substantial. Specialist IT staff are often required, not to mention the expense of the hardware, or the energy costs involved with running servers 24/7.

If your IT estate is growing unwieldy, colocation services may be the answer. Hosting your server or servers within an existing data centre offers a cost-effective solution for companies looking to enhance their data management, reduce expenses, and improve overall operational efficiency. In this blog, we’ll explore the various aspects of colocation that contribute to these substantial cost savings, from energy efficiency to economies of scale.

1. Reduced capital expenditure

Building and maintaining an in-house data centre is a costly endeavour. It requires significant upfront investments in physical space, power infrastructure, cooling systems, and server hardware. That’s fine for a dedicated data centre that serves multiple clients, but less so for a business’ own needs.

Colocation providers alleviate this burden by offering state-of-the-art facilities where businesses can place their servers and IT equipment. This eliminates the need for costly infrastructure investments, allowing organisations to redirect their capital towards core business activities.

2. Economies of scale

Colocation facilities are designed to host multiple clients within a shared environment. This setup takes advantage of economies of scale, with servers requiring relatively little extra energy to serve a substantial number of clients. This process facilitates cost savings that individual companies might struggle to achieve on their own.

By sharing resources like power, cooling, and security, colocation clients benefit from lower operational costs while still enjoying enterprise-grade infrastructure. Compare this to hosting your own data centre or even individual servers, where all of the burden of operating costs and maintenance falls on you, and the disadvantages are cast in stark relief.

3. Energy efficiency

Given recent fluctuations in prices – and the growing energy consumption of data centres in general – modern colocation data centres are optimised for energy efficiency. As well as harnessing cold climates, they often incorporate advanced cooling technologies, such as hot/cold aisle containment and free cooling, to reduce energy consumption.

The growing concern around the environmental impact of data centres means providers are also investing in solar panels and other renewable energy sources, further lowering the carbon footprint of their data centres. These energy-efficient practices translate into cost savings for colocation clients, as they pay only for the energy their equipment consumes.

4. Scalability

An in-house data centre is inflexible by definition. The need to constantly run and maintain the data centre precludes the ability to scale your investment up or down, with the cost of upgrading hardware often preventing meaningful improvements to power or capacity. Colocation services, by contrast, offer flexibility and scalability that align with the dynamic needs of modern businesses.

Instead of overprovisioning their own data centres to accommodate future growth, companies can scale their colocation footprint as required. This “pay as you grow” model ensures that resources are allocated efficiently, avoiding unnecessary expenses associated with underutilised IT infrastructure.

5. Maintenance and support

Data centres are the nerve centres of the internet, with a myriad of interconnected systems all running in harmony. Any one component failure can cause a cascading effect if not managed properly, and without the necessary redundancies in place. Keeping across all of this and maintaining it properly is a fulltime job, and one that few businesses can afford.

Colocation providers offer round-the-clock support and maintenance services as part of their packages. This eliminates the need for companies to employ in-house IT staff to manage their data centres, saving a substantial amount on labour costs. Data centre providers also have experts on-site to handle equipment upkeep, ensuring optimal performance and the maximum longevity of their hardware.

6. Enhanced security

Physical security is a factor for all kinds of data, but data centres have to contend with digital security, too. The value of a data centre is generally to provide cloud resources, meaning files and software that can be accessed everywhere. However, this also means that the data centre can be attacked from anywhere – making good cybersecurity practices crucial.

Colocation facilities recognise this, and make security a top priority. They invest heavily in robust physical security measures, including biometric access controls, surveillance cameras, and security personnel. By colocating their equipment in such secure environments, businesses can reduce the risk of costly data breaches and their related expenses, from lost progress to reputational damage.

7. Disaster Recovery

Whether or not you host your own data centre or servers, an IT disaster can have major implications. Whether you lose equipment due to a physical disaster or lose data in a cyberattack, data loss and equipment failure can cause you to lose progress, impact client and customer relationships, and cause immediate financial damage to your business.

Colocation facilities often provide disaster recovery options, including backup power generators and redundant connectivity. These features are critical for minimising downtime and potential losses in case of unexpected outages or disasters. Companies that take advantage of colocation for their disaster recovery needs can avoid the substantial costs associated with prolonged downtime.

8. Compliance and certification

One of the attendant benefits of running a data centre is the certifications it requires. Handling other people’s data demands the highest physical and data security standards, as well as assurances on things like server uptime. This is something that can be out of the reach of businesses, or simply not worth the investment and upkeep.

Many colocation providers adhere to industry standards and certifications, such as ISO 27001 for information security management. This compliance can be a substantial cost-saving advantage for businesses operating in highly regulated industries. It reduces the effort and resources required to meet stringent regulatory requirements.

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Colocation services offer a multifaceted approach to cost savings for businesses of all sizes. By eliminating the need for substantial upfront investments, leveraging economies of scale, optimising energy efficiency, and providing scalability and support, colocation providers enable companies to focus on their core competencies while enjoying the benefits of world-class data centre facilities.

The long-term financial advantages of colocation make it a strategic choice for organisations seeking cost-effective IT infrastructure solutions in today’s digital age. Partner with us, and benefit from convenient, unrestricted 24/7 access to your equipment, as well as professional support and remote hands delivered, get in touch here.