Colocation, or simply colo, is a common term heard in the data center industry. But what does it mean and why is it so important? A colocation facility is a data center in which a customer can rent space for their servers and other computing hardware.
A colo provider offers its tenants a room or rack space, cooling, power, connectivity, and security. The tenant is then responsible for providing servers and storage. Leasing space can be by the rack, cabinet, cage, or room.
Why would a customer want a colo rather than their own facility?
As the cloud continues to grow and more and more data is going digital, every industry is now faced with how to manage their digital storage. From healthcare to finance to education, how to best securely store information is a top priority. While owning one’s own facility may sound like the ideal solution, from a CapEx (capital expenditure) standpoint it might not make the best financial sense. Many companies run lien and have limited IT resources. Thus, many are turning to colo options for secure storage.
Through colos, customers receive benefits such as:
- Cost Control – By renting, costs are put into the provider’s contract, allowing customers to budget accordingly.
- Staffing Control – Facility maintenance, such as cooling, power and connectivity are the responsibility of the colocation provider.
- Scalability – Colo providers tend to have ample space to allow a business to grow. Whether that growth requires more racks, cabinets, cages or the need for a full data hall.
- Reliability – Colos offer redundancy and disaster recovery, bandwidth connections through multiple service providers, uninterrupted power supplies and backup power generators.
- Security – Colo providers are responsible for maintaining the equipment for several companies, resulting in them providing multiple layers of security from limited entry points, card access control, on-site security staff, and video security to name a few.
Overall, leasing space in a colocation facility allows a customer to have the costs of the rented space fall under OpEx (operational expense). OpEx costs are fully tax-deductible, while CapEx costs are amortized. While the leased space falls under OpEx, it is important to remember that any owned equipment – such as servers and storage – falls under CapEx.
Different types of colocation facilities
Based on a customer’s needs, there are several options when it comes to a colo facility.
- Retail colocations offer customers a shared data center environment in which they lease a rack, space within a rack or a cabinet for higher security.
- Wholesale colocation offers the customer a dedicated data hall within a larger colocation data center facility.
- Hybrid cloud-based colocation falls into a customer’s hybrid cloud strategy.
What role does E2 Optics play in colocation?
At E2 Optics, we assist our customers when it comes to their colocation needs. As mentioned, with many customers running lien they do not have the IT staff on hand to address rack moves, connecting cables, or basic maintenance of their equipment.
After initially fitting out a space for our customers, our Smart Hands team comes in and can act as a liaison between our customer and the colo provider. This allows us to understand the rules of operating within the facility, ensuring our customers’ equipment is operating at peak performance at all times. Our team members are physically located onsite and can assist in setting up a firewall, managing data center equipment, detecting and responding to threats, complex cable configurations, equipment testing, and general troubleshooting. Thus, freeing up our customers’ IT teams to focus on more value-added projects.
 For more information about E2 Optics, please visit our About page here.
Nick Cassady
Northeast Regional Operations Manager
Nick Cassady is an experienced data center/hyperscale operations manager with more than 20 years of industry experience. His proven track record of delivering successful projects through strong leadership and team building skills has helped transform E2 Optics’ presences in the northeast region. Outside of work, Nick is an avid Ohio State University fan and golfer who enjoys spending time with his family.
