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The Question of Data Center Colocation

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by Al Matukonis

This blog post is co-authored by Chris Leiner, director.

Top_5When it comes to outsourcing data centers, more and more North American companies are expressing interest in engaging two different providers: one that is responsible for the data center facility itself and one that provides infrastructure management services on the equipment that runs in the data center.

Typically, enterprises that make the case for a colocation solution like this are hoping to divide responsibility. If an organization experiences problems with its data, it can apply pressure specifically to the provider managing the infrastructure management services, which is where problems most often lie, and not to the provider that operates the facility.

Ultimately, this trend is about flexibility. In the past, enterprises were locked in to all-in-one engagements with outsourcing service providers that were responsible for both services and facilities. To change infrastructure management services providers, an enterprise had to face the difficult challenge of physically moving from the provider’s data center—servers and all. Colocation makes it possible for an enterprise to more easily change services providers as their needs change.

If you are evaluating your data center strategy and considering separating your data center facility services from your infrastructure management services, keep these Top 5 points in mind.

1. Spell out your requirements in the contract. If you contract with an infrastructure management services provider that subcontracts to a data center facility, you will want to structure your agreement with an option to leave the assets and related data center facility services in place when the infrastructure management provider contract ends or renews. Also make sure you retain the right to sign a separate agreement with the subcontractor data center facility provider.

2. Choose your colo partner carefully. Some enterprises prefer to hold the colocation contract with the data center provider instead of the infrastructure services provider. This will make it easier to terminate the contract with the infrastructure provider while remaining in the colocation center since there is no need to transfer the facility contract. Also, for disaster recovery, be sure to choose a colocation facility provider that offers locations and capacity sufficiently far apart.

3. Bring in the experts. Hosting and transitioning to a new third-party colocated data center may require specific subject matter expertise that the infrastructure services provider does not have. Be sure to secure this expertise, which is different than the expertise needed for taking over support of existing data center infrastructure.

4. Plan for all possible eventualities. If you decide to repatriate services from the infrastructure management services provider and the infrastructure is in provider-owned data centers, you may be asked to pull out of the data center. This is a complexity that enterprises do not always anticipate at the time of the decision to repatriate. Note that some providers may not have an issue with you remaining in their data center. In either case, negotiate upfront for potential future needs.

5. Build in flexibility. Be sure your colocation facility provider has direct high-speed interconnects with a wide range of major cloud providers. As cloud adoption and internal virtualization and consolidation reduce the need for a physical data center footprint, your contract should allow you to realize the corresponding cost reductions.

The ISG Data Center Competency team can apply its experience and expertise to your data center services engagement. Contact me to discuss how we can help.

About the author

Mr. Matukonis provides ISG’s clients with creative solutions and counsel based on his over 25 years’ experience in technology service delivery. In supporting his clients he draws on a wide range of experiences, as a developer, a CIO/CTO, a Supplier technology delivery executive and now as a ISG advisor.