How to Choose a Colocation Data Center Provider

Here are five steps you can take to select the service provider that's right for you

Tim Kittila

July 7, 2016

8 Min Read
How to Choose a Colocation Data Center Provider
(Photo by Joe Raedle/Getty Images)

Whether driven by finances, disaster recovery planning or simply wanting to focus resources on core competencies, more and more companies are making the decision to move a portion or all of their data center operations to a third-party data center colocation provider. Depending on a company’s business drivers, colo providers are often an attractive alternative to maintaining an in-house data center (and all that goes with it).

Often companies find that an internal data center is not accomplishing the goals and objectives tied to the business strategy. The benefits of having a vendor house a company’s IT assets range from realizing a large reduction in future capital costs, increased reliability, simpler management, a smaller number of employees dedicated to managing the data center, and the flexibility to expand or reduce the amount of data center space used.

However, for many, making the decision to move data center operations to a colocation data center is a monumental task. It is a complicated and emotional decision that at its core requires significant change. Despite all the benefits that come with moving to a colo solution, the apprehension that comes with changing the status quo is often the biggest obstacle to making the leap.

Once a company decides to make the move to a colo, it takes a lot of careful planning to ensure the right strategy is selected for the business. To determine the best approach for their corporate needs and objectives, companies should take five key considerations into account:

Determine the Data Center Goals Across the Company

Technology supports a company’s business goals and objectives, and the data center supports the technology. Therefore, the company must clarify what its long-term data center goals are, and what they mean for everyone involved in data center operations. Different departments often have varying goals and objectives that impact data center strategy.

The first step to getting everyone on the same page is identifying all data center strategy stakeholders. To avoid disconnect among the stakeholders, it’s important to have a diverse cross section of employees weighing in on the overall data center strategy, goals, and objectives. This group should encompass senior leaders as well as subject matter experts, such as systems administrators and software developers. This ensures that all perspectives and data center use scenarios are examined. For example, upper management may not be aware of issues technicians encounter, such as lack of monitoring and alerting tools for the network. Likewise, the subject matter experts might not be aware of potential acquisitions that will alter the direction of the business.

An important step in this process is interviewing the stakeholders and identifying their data center goals and objectives. Stakeholders’ goals should be longer-term, high-level items they want to achieve, such as improving data center uptime or reducing time spent running a data center. Their objectives would be short-term milestones that support each of their goals, be measurable, and include specific start-to-finish timelines. Each stakeholder should then rank these goals by importance in meeting the overall company objectives.

After the interviews with goals and objectives identified, the next step is to bring stakeholders together and form consensus on what the most important data center-related goals and objectives are. From there, they can brainstorm the tactical execution of how these goals and objectives can be achieved, setting the stage for a comprehensive data center strategy.

Determine the Colo Provider’s Role in Achieving Data Center Goals

Once a data center strategy is developed, discussions should shift to determining the level of involvement the colocation data center provider will have in executing the strategy. Many colo providers offer more services than just power, cooling, and server cabinet space for IT equipment and can be used to help augment staffing requirements. Colos often provide a range of options, from managed services to cloud offerings. They can also offer a hybrid approach that combines both company-owned IT equipment in cabinets and services in the colo’s cloud. The key parties must take the overall goals into consideration when deciding which colo services they need.

As a side note, even after a colo provider has been selected and your company moved into a colocation data center, it is important to continue reevaluating the services provided by the colo and their level of involvement with your data center operation. Technology changes quickly and by exploring any new services available, additional ways to improve efficiency, and options for reallocating precious internal resources without compromising reliability can be uncovered.

Create a Strategic RFP

Once data center-related goals and objectives are in place and it is determined what colocation data center services make sense for the business, it is time to develop a request for proposal (RFP). Building an RFP that addresses your specific business requirements is essential for finding the right colo provider.

Beyond background on your company, a comprehensive RFP includes clear instructions on what information to include, a list of your company’s mandatory requirements, an estimate on the initial number of cabinets, and the power necessary to support current and future growth projections. Additionally, it is key to give colo providers the opportunity to describe all aspects of their offering, from electrical infrastructure to how they handle deliveries. The RFP should also request information relating to pricing and terms, sample agreements, and floor plans showing where your company’s IT equipment would reside, electrical one-line diagrams, and facilities maintenance records.

Finally, as you prepare the RFP be mindful to make sure that all the questions and requested information is clearly worded so that the colocation data center providers include the right information from the start. This saves time for everyone and eliminates multiple requests for more information or clarification on responses. It also demonstrates to the prospective colos that you have thought through the process and are prepared to make the transition – in effect demonstrating that you will be a “good tenant” and one that they WANT to have in their facility.

Selective Distribution

RFPs take a lot of time to develop and even more time to evaluate. To improve the effectiveness of the RFP process, it is important to be selective when distributing the request. Most states have several colo providers available to choose from, but upfront research will help determine which colos are the best fit for your data center needs.

Potential candidates should meet your mandatory requirements listed in the RFP. For example, let’s say the colocation data center is for a disaster recovery site, which makes its location important. If your company requires that the site be less than 25 miles away, it automatically eliminates colos that are farther. If you require that the colo must provide remote-hands services, such as rebooting hung up servers or swapping out hard drives, colos that don’t offer this service will not make the cut. Taking time to do important preliminary research before sending out the RFP saves time for both you and the colo in the long run.

Choosing the Right Colo: Use a Matrix

Once all colo RFP responses are received, make an apples-to-apples comparison to determine the best candidate. This sounds easy in theory, but most RFPs have multiple questions and each question varies in importance, depending on the company’s needs. The amount of information generated by colocation provider RFPs is large and complex. To try and make a comparison to determine the best colocation data center can be overwhelming.

An effective way to compare each RFP is to create a weighted score matrix. This matrix consists of a spreadsheet listing all colocation providers and all questions from the RFP. Each colo provider is scored on how well their responses meet your company needs. This could be a number from 1 to 5. Also included in the matrix is a weighting from perhaps 1-20 in increments of 10. For example, if a particular colo scores 3 out of 5 points on “technician response time” and this is extremely important to your business, this question may get a weight of 20. In this case, that colo receives 60 total points for that question (3 points X 20 weight = 60 total points).

Cost is another important factor when selecting a colcation data center provider. No two colo providers have the same pricing model so this requires extra attention. While one colo may directly pass all power utility costs to the customer, another colo may include the cost into the monthly rent charge. Either way, the most effective method for making an apples-to-apples comparison is to add up all costs each colo provides for the services needed. Then, to provide a fair comparison regardless of each colo’s pricing model, break down what your monthly cost will be, as well as your three-year total cost of ownership (TCO), five-year TCO, seven-year TCO, and 10-year TCO.

A data center strategy requires careful planning and consideration, and choosing the right colocation provider can be crucial to meeting the company’s goals. Following these five considerations will ensure you make the right choice for your colo needs and reap the benefits of data center colocation to help achieve your company’s goals and objectives.

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