How to Understand and Evaluate Potential Colocation Data Center Providers?

Today, as demand for colocation and wholesale data centers continues to grow, colocation service providers are responding to future market forces that present both great opportunities and significant challenges.

Data center providers are dealing with changing technology demands, emerging trends, and increasing competition, and are transforming their models to best respond to all of these developments and ensure they are prepared for future customer demands.

In addition to the industry shifts that have created the emerging model, competing in the colocation data center industry is not easy. It is challenging to compare providers that offer the same features and quality of service, differentiate between providers, and ultimately decide which provider's services best meet your infrastructure needs.

[[222246]]

It’s important for users to always keep in mind the wider industry context when evaluating what a colocation provider is dealing with. Here are some of the developments that are having a significant impact on the colocation data center industry:

Transfer Technology Requirements

As IT technology and application development become more flexible and redundant, data center equipment vendors are seeing some of their users reduce their need for redundancy (from 2N redundancy to N+1 or even N). Over the years, rack power density has increased, but the average power density in the data center industry is still 6 to 8 kW/rack.

But now we see that rack power density is increasing to support more computing-intensive workloads and applications brought by cloud computing, big data, the Internet of Things and even 5G technology. In order to meet customer needs, hosting service providers now need to increase flexibility to adapt to changing technology needs and are moving towards a "flexible and repeatable" construction method (flexible prefabricated modular power supply and room space containment channels).

This is beneficial for users of managed services, as they can find a provider that can meet their current needs and can flexibly configure them as needed.

The influence of industry giants

Large cloud computing providers, including Internet giants such as Google, Microsoft, and Amazon, have taken up a lot of data center space and driven more demand for colocation services. While this is good for colocation providers, it is also changing some of the requirements for traditional colocation providers to provide services, as these industry giants consume a lot of available space and drive future data center construction.

Internet search engine service providers or content providers need to meet the redundancy requirements of different physical infrastructures of financial institutions. This supply and demand relationship pushes the data center industry back into the era of "speculation".

Increasing competition

Many colocation providers are increasingly facing cost pressures, which often leads them to cut back on their current offerings to reduce losses to the competition. The more aggressive providers are looking for ways to further optimize their data center operations while providing customers with exceptional outcomes and customer experience.

It is easier than ever to find and match your business and IT needs, risk appetite and requirements. There are many excellent providers willing to work together and establish the right approach for your outsourcing needs. As competition increases, there is a need to make services more in line with demand and meet the needs of both suppliers and consumers.

While users face these challenges in evaluating the right colocation provider for their business, colocation data center providers are also seeking to balance changes in data center operations with continued innovation.

Questions to consider before signing a contract

As a potential user of a colocation data center, it is important to go beyond the basic variables of price or space to gain a deeper understanding of the services provided by the provider and the status of its current operations. By conducting a thorough exploration of the data center facilities, it will help you choose a provider that best meets your needs and avoid any surprises after signing a service level agreement (SLA).

• Transparency. Transparency is critical when evaluating hosting providers. As a user, it is necessary to give the provider as much visibility into the operating environment as possible. For example, do they have a formal change management process? Do they have an incident response team? Do they conduct emergency simulation exercises? How often is maintenance of critical infrastructure performed and what does it include? Are maintenance reports available? If the answer to these questions is no, or the provider cannot or is unwilling to share this information, it should cause users to be wary.
• As a user, you need a supplier who is transparent about their business and has documentation to prove they are not just talking on paper. Providing transparency also solidifies a stronger partnership, which allows suppliers and customers to work together to achieve common goals.
• Built-in control. Another factor that users are concerned about is capacity management. Whether it is power transformers, power plants, fuel supply or refrigeration equipment, users need to understand how much capacity the supplier has, and how to plan supplier management capacity is critical. Some questions are important: Are there others on the shared resource? How many people will affect me?
• Over-subscribing existing power and cooling resources (based on actual usage) can be a dangerous strategy, sometimes with unknown threats until something happens. This puts your IT infrastructure at risk, so colocation providers must have built-in controls in place to manage and report on power, cooling, and even space and capacity.
• Managing latency. Additionally, network connectivity and latency are critical in relation to the business applications you are seeking to outsource. Data center location is therefore important. Additionally, the ability to launch a disaster recovery site is a very important consideration: does it have to move the business (i.e., compute, network, and storage) or does it need to be migrated entirely? Since some applications can have a significant impact on latency across the network, you must know the applications you want to move to the colocation data center and their latency requirements to ensure the provider can meet those needs.
• User portal. A managed service provider’s user portal is often an afterthought, but can help uncover some light in these areas. A well-designed customer dashboard can provide a comprehensive view of services, performance monitoring and measurement, and capacity statistics to track or monitor ongoing work. Therefore, users should request a demonstration of the portal to understand the assets, statistics, and operational information they will have ongoing access to.

For many organizations, choosing a managed service provider will be one of the most important decisions they make and will have a significant impact on achieving their business and operational goals. Once you are well prepared, the right provider will take the time to listen and understand what your business goals are and how a partner can help you achieve them.