Colocation datacenters: A viable option for today’s enterprises

Nilesh Rane, Associate Vice President - Products & Services, Netmagic Solutions

The business environment today is in a state of constant disruption. Business requirements of enterprises are rapidly changing as they try to adjust to the changes in the environment. Though many enterprises would like to have a control over their IT infrastructure but the expense of managing and setting up in-house facilities is huge. At the same time, outsourcing the IT infrastructure has its own share of concerns with security and control of data and assets and adherence to regulatory compliance being the most important.

In a new era of computing that is increasingly defined by major trends such as virtualization, cloud services, mobility, big data, and social media, colocation stands out as the most viable option for most business enterprises trying to relook at their IT infrastructures. Colocation helps business enterprises to increase agility, save money, reduce power consumption, improve uptime, eliminate management complexity, and simplify adherence to regulatory compliance requirements.
Drivers for Colocation
The increase in number of business enterprises opting for cloud services and virtualization as a part of their IT setups is driving the need for more datacenter services. According to Gartner, India will be the second largest market for datacenter infrastructure and the second fastest growing market in Asia-Pacific in 2015. Indian enterprises will be focusing on building intelligent datacenters that focus on optimizing existing hardware assets by using additional software capabilities. This will drive increased attention on newer trends such as public cloud, datacenter consolidation, colocation and integrated systems.

With the “build vs. buy” debate still going strong in IT infrastructure circles in India, questions being asked by business enterprises as they assess their existing in-house datacenters are:
• Should we endure a datacenter construction project that can stretch over months or years?
• Should we consolidate resources into your own datacenters, even if floor space is shrinking fast?
• Can we provide the redundant datacenter and network resources necessary to support 24x7x365 operations?
• Can we meet the security requirements needed for data protection and compliance?
• Is owning and operating a datacenter a strategic differentiator for my company?
• What is my organization’s risk tolerance and culture?
• Does my organization have the capacity to forecast and plan effectively?
• What is my cost of capital? Does the business favor operational expenses or capital expenses?

The answer lies in looking at colocation as a viable option for enterprises who are seeking alternative solutions to address their business and IT needs. Advantages with colocation are many – Colocation enables a business enterprise to increase agility, save money, reduce power consumption, improve uptime, eliminate management complexity, and simplify adherence to regulatory compliance requirements.
How does Colocation Enable Business Enterprises to Stay Ahead?
For most organizations in India, colocation makes more economic sense than building a traditional facility. According to a research report by Forrester – ‘Build or Colocate? The ROI of datacenter facilities in India’ - the NPV over 15 years of building and managing a traditional datacenter in India jumps to $56 mn, while colocation is $30.5 mn.

Cost Control
Colocation can provide opportunities to consolidate data centers, take advantage of monthly fee structures and other ways to drive down the costs of computing.

Building vs. Outsourcing
With capital costs under close scrutiny, building a whole new datacenter to keep up with growth may not be an option. With the unpredictable nature of business, you may provision an entire new datacenter to suit your needs today, only to have it sit idle a few months later as needs change and demands lessen.

Colocation provides a turnkey solution and a more economical alternative. Instead of investing in another datacenter of your own, you lease space in a provider’s datacenter facility for a monthly fee. You maintain ownership and control over your systems, but you’re freed from paying for the facility itself, and the costs of powering, cooling and securing it.

Consolidating with Colocation
To decrease hardware, energy, staff and operating costs, business enterprises are looking to reduce their datacenter footprints by consolidating their facilities. Datacenter congestion can result, leading to power, heating and cooling issues that cause performance problems.

Colocating equipment in a provider’s datacenter facility can reduce these risks, while eliminating crowded floor space and internal consolidation headaches. Further, you can divert funds that would have been used for facility construction into refreshing technology assets, replacing aging hardware with more cost- and energy-efficient technology, such as high-density racks and blade servers that pack more processing power into less space.

Always on Infrastructure
Business today operates 7x24x365, so your systems have to, as well. However, server racks, cabinets and blades can generate a lot of heat in the datacenter, which can cause system failures.

Since colocation providers are able to spread operational costs over many customers, and can be held to service level agreements that guarantee performance, they can implement successful power management, climate control and backup strategies. This includes redundant power supplies, cooling technologies and backup generators, which can all work together to deliver up to 99.999 percent availability.

A fully redundant datacenter environment isn’t enough. To keep business critical applications available, you need fully redundant, dual-rail network connections to your hosted environment. With the 2N+ power redundancy offered by some colocation providers, you can have two completely separate power paths. With no single point of failure, if a power outage occurs, it can be transparent to users and to your entire operation.

To meet the availability needs of your different systems and applications, your colocation provider should offer options for establishing those redundant connections. For example, you may want to use different carriers to provide the two different physical paths of entry into the datacenter building itself. Or, you might want two different physical nodes to the same or different carriers.

The point is, you should have the flexibility to select the redundant connections that work best for your business. Choosing a vendor who already has these redundant connections as part of their colocation offerings can smooth the transition path for your enterprise.

Disaster Recovery
A downed power line can cut off access to your mission-critical applications for a few minutes, hours or even days. Outages caused by disasters can delay recovery and disrupt business even longer. Colocation in a provider’s datacenter can be a critical part of your business continuity strategy by offering you an alternative to setting up your own failover site, and one that is geographically separated from your primary datacenters.

Enhanced Security

With so much focus on protecting your servers and network from hard-to-detect viruses, worms and other malware, it’s important to remember to address the physical security threats that can happen right before your eyes.

While hackers are always coming up with new ways to see or steal your data, the people trying to make their way into a datacenter facility can still rely on some tried and proven strategies.

For example, tailgating through a badged entry way is a popular ploy. You need to guard against unauthorized entry, but the budget and staff needed to fortify the security of an in-house datacenter can be prohibitive.

Your colocation provider can address these concerns by providing multiple levels of security, such as:
• Hardened datacenter facilities with a 7x24 staff already in place
• Circular doors that allow only one badged person into the facility at a time
• Guards on duty to view badges and check bags before entry into the main facility
• Man traps that create a transition place between the lobby and the datacenter, large enough for one person only
• Keyed access to server cages and cabinets to avoid unauthorized entry into other datacenter areas
• Closed-circuit television to monitor the inside and outside of the building to spot suspicious behavior

Beyond the security controls above, leading colocation providers undergo third-party compliance audits to ensure the policies and procedures they have in place meet strict data security and privacy standards.

In addition to complying with ISO27001 audits, your provider should adhere to Statements on Standards Attestation Engagement (SSAE) type II audits and, specifically, the SSAE 16 standard. With revenue, reputation and customer confidence at stake, your colocation provider will also need to meet Payment Card Industry (PCI) DSS standards to ensure the safety of credit card transactions that are processed on servers within their datacenters. With new web threats always on the horizon, maintaining compliance with changing requirements is critical.

To further relieve compliance demands, colocation providers should also have the flexibility to help you meet industry-specific compliance standards, such as ISO 27001.
Better Connectivity
As your enterprise grows and the proliferation of data expands, the need for greater bandwidth and speed emerges, and you are faced with the choice of undertaking expensive on-premise bandwidth installations that must be redundant. Otherwise, the network becomes bogged down, slowing productivity and performance.

Using a colocation facility gives businesses the opportunity to access voice and data bandwidth at substantially lower prices. Through colocation, businesses of all sizes can find access to the bandwidth they need, including voice, MPLS, VPLS, EPL and Internet services via redundant and diverse fiber. Many datacenters offer services that range from Ethernet to Gigabit Ethernet to multiple T1s and DS3s.

Support for Growth
Whether growing through acquisition, increased business or market expansion, you can’t wait through a long datacenter construction process. Colocation allows you to tap into a ready-made facility and datacenter staff. You can quickly scale from one server to a few servers or even across multiple colocated datacenters. As needs change, you can quickly scale back without continuing to pay for and support an in-house datacenter you no longer need.

Think Beyond Colocation
Consider other opportunities a colocated facility could offer your business enterprise. For example, if there are cloud services to tap into in the same datacenter, creating your own private cloud can be as easy as extending your virtual private network into those resources. The cloud can become just another node on your existing network.

Or, think about having your provider host and manage applications for you in their datacenter to provide ongoing software life cycle support that frees your staff for other priorities.

Building, deploying, and managing your own datacenter to address the rapidly changing needs of today’s businesses is among one of the most important challenges. The fundamental shifts taking place in technology, including virtualization, cloud, big data and mobility, are making it more imperative that IT leaders focus on key parameters around issues surrounding cost savings and energy efficiencies, security and resilience, scalability, reporting and control, and compliance.

Thus, when faced with the decision to maintain the core of the business in an unsuitable environment, or invest millions building an expensive datacenter, colocation, with its secure environment and dedicated staff, will surely become the compelling and economical choice for most business enterprises.