Carrier Neutral Connectivity at Colocation Data Centers

By: John Shepler

Companies feeling starved for bandwidth may not realize that they’re doing it the hard way. Instead of making the carriers come to you, there are advantages in you going to where the carriers are.

It’s All Happening at the Colo
The places where carriers flock are called colocation or colo centers and carrier hotels. These are large data centers that are meant to serve a variety of tenants. Contrast that with the typical data center that serves only a single company. In fact, most companies want nothing to do with renting out space in their data centers. The security issues alone make them blanch.

Why Do Colocation Centers Exist?
It has to do with economy of scale. Say you have 100 companies and each one needs a data center. They may well construct their own in-house data centers sized to meet their needs. This involves creating a dedicated space that is environmentally controlled, secure, with fire protection and backup power. Uninterruptible power supplies based on batteries and inverters cover short term power glitches. Anything over a few minutes depends on diesel or gas generators outside.

Data Center Costs
As you might expect, there is considerable cost involved in building and running a data center. Aside from the initial capital investment, there are constant operating costs involving air conditioning, electric power and support personnel. These costs persist regardless of business level and the equipment may sit idle for two-thirds of the day. Smaller companies often can’t justify the expense of round-the-clock tech support.

Connectivity Counts
What level of bandwidth you can get and how much it will cost are largely a function of where you are located. If your offices are in a smaller town or rural area, you may have only a single provider to pick from and severe bandwidth limits.

Economy of Scale
Now, what if those same 100 companies decided it would make more sense if they all moved into a single much larger data center that would serve all of their needs. You might think the overall total cost would be similar, but actually they would be much lower.

It’s the economy of scale that saves. Each company only needs racks and cages large enough to house its servers and other equipment. A few larger backup generators can supply emergency power when needed instead of 100 smaller generators on standby. A common security force can handle access control and monitor intrusion sensors. A common tech support group can handle the occasional needs of all companies 24/7.

From Owner to Renter
The tenant companies switch from an ownership to a rental model. They don’t need to overbuild, because they can always rent more or less facilities as needed. The colo operator takes the responsibility of building the facility, providing utilities, security and tech support.

A Magnet for Carriers
Have you ever had a carrier tell you that it’s just too expensive to bring fiber optic service to your company? They might do it, but you’ll be responsible for the construction costs and they can be eye-popping. The colo center, howler, acts like a carrier magnet. They see 100 potential customers for their service and make their fiber available. Most colo centers are near populous areas, making the construction relatively easy.

Will you have a carrier to provide you bandwidth service at the colo? Most likely, you’ll have at least several and perhaps a lot more. Each carrier has its own colo space with racks and cages. It costs them little more to bring in high bandwidth service for 100 companies than a single customer. That, plus the competition of having multiple carriers bidding for your business, makes pricing more attractive than it might be to your own facility.

Meet Me for Service
Colos have an ingenious setup called the “meet me” room or MMR. This is an area dedicated to making cross-connections. The colo operator runs copper or fiber cabling to your racks from the MMR. They also run copper or fiber from the carriers to the MMR. When you contract for bandwidth, the colo patches you to the carrier and you’re all set. If you change your mind, you can work out the next contract with a different carrier and the colo will simply move your patch cord.

One additional advantage of using an MMR is that there is no “local loop” charge because the colo is providing the “last mile” or, in actuality, “last foot” connection.

Two Types of Colos
You should know that there are a couple different types of colos. One is operated by a single carrier. They build the facility for their own needs and then rent out extra space. You can get really high bandwidth and reasonable prices in such a facility, but you may have only one or a few carriers to pick from.

The second type of colo is operated by a third party who is in the colocation business and doesn’t favor any customer or carrier. These are often called carrier neutral facilities because you aren’t required to connect to any particular bandwidth provider.

Clouds and Colos
Cloud services are often located in colocation facilities. This gives the cloud provider a facility to support their extensive servers and storage. If you are collocated within the same facility, then it’s a simple wire or fiber connection to hook you up with one or more cloud service providers.

Are your data center costs higher than you would like or are you having trouble getting the WAN bandwidth you need to support your business? This would be a good time to investigate what’s available from a number of colocation centers and cloud service providers.

100 Mbps Colocation Center Bandwidth

Companies often look to colocation as a way to avoid the capital and operating expense of running their own data centers. There is also another important incentive to go the colocation route. It’s high bandwidth availability at lower costs.

A colocation center, or colo, is a facility that serves the data center needs of many businesses. Each server farm requires the servers themselves, networking switches, routers and appliances, equipment racks, rack wiring, electrical power, cooling air, and connectivity. Plus you’ll need physical security, fire suppression and a staff to monitor operations and take corrective action 24/7. You can provide all of this in-house or get it at a colocation center.

What makes a colo center cost effective is economy of scale. Instead of each customer having to maintain their own backup generators and fire suppression systems that are rarely used, the colocation facility has much larger units that serve all customers. The costs don’t scale linearly. The incremental cost of adding another user to the facility is pretty low and the facility cost spread over all users is less than what you can do on your own.

The somewhat hidden secret of colocation centers is that they have bandwidth available that you may not be able to afford on your own. A common connection is 100 Mbps Fast Ethernet. You know that it’s no great shakes to connect a 100 Mbps Ethernet node to your own LAN. Getting a 100 Mbps connection beyond your property line may be anywhere from expensive to impossible. At 100 Mbps, you are beyond the capability of twisted pair services such as EoC or T1/E1 lines. You’ll need fiber optic cabling brought into your building and lit for SONET/SDH or Metro Ethernet service.

Why is there such a difference in price between 100 Mbps bandwidth provided in a colocation center and the same level of service delivered to your facility? One big reason is construction costs. Downtown in a major metropolitan area there may be many fiber facilities in your office building or nearby. If you order a significant amount of bandwidth you might not even be charged construction costs. But move a bit off the beaten fiber path and those charges go up dramatically. If you are located in a smaller town, industrial park or rural area you can be looking at tens of thousands of dollars or more to trench fiber optic cable from the nearest carrier point of presence.

The other reason for bargain prices at colocation facilities is competition. Once again, depending on population density and popularity of high bandwidth network services, you might find yourself with only one carrier serving your location. Your negotiating ability is pretty limited without competition. Colocation centers, however, are carrier magnets. Service providers know that there are dozens or hundreds of customers in a single building who all need their services. It’s no wonder they all set up points of presence within the colo. Often, there is a “meet me room” where carriers and customers are connected.

The combination of having several or more eager carriers vying for your business combined with the trivial construction costs of running a drop to your equipment racks is what makes it easy and relatively inexpensive to get all the bandwidth you want in a colocation center. Can you say the same for where you are now? There’s an easy way to find out. Simply request bandwidth availability and pricing for both your location and a nearby colocation facility.



Note: Photo of server rack wiring courtesy of Guillaume Paumier on Wikipedia Commons