Colocation facilities are not all built the same, so watch for the small print when colo shopping. Colocation facilities must have networks in them — with secure and preferably neutral access to these networks.

 

One of the founding principals of my company, Mzima Networks, relies on successful and abundant peering to achieve a higher-performance IP network; therefore access to other networks is an absolute requirement. This is true with many other service providers as well. 

 

In general, network providers source colocation facilities based on location and convenient access to other networks. If a facility is low cost, in an underserved market, it is not attractive for network operators due to the amount of bandwidth they need to sell to make the space profitable for them. On the other hand, network operators can take more expensive space, maximize its footprint and gain access to a multitude of network providers making the space a very wise investment. You can compare this to real estate; the colocation facilities that have major access to people, such as a city penthouse, might be expensive, but there’s much more activity, versus a sprawling, empty house in the middle of the woods. The lack of connections to the outside makes the land less appealing.

 

With today’s economic challenges, it’s even more important for companies to make smart colocation choices. Recently, at the Tier 1 Data Center Transformation Summit, it was noted that colocation prices were increasing on an average of 10 percent year-over-year. With financing constrained and with limited new facility build-outs planned, the price for space could increase dramatically (good ol’ supply and demand). 

 

As colocation facilities fill up space, the ability to build out additional space or secure new facilities is going to be limited. So, rather than build a ‘ranch,’ companies have to adapt to the changing economic times, recognizing that technology requirements are going to continue to grow, and instead, build out ‘skyscrapers.’ 

 

This is what the cloud enables companies to do. By leveraging optimized, high performance IP transit solutions, companies can use the ‘cloud’ to diversify its business applications, network requirements and colocation footprint literally throughout the world. The more network operators that fill up a facility, the more opportunity a colocation provider has to attract the ‘skyscraper’ businesses, virtual data center providers that leverage VMware-type solutions to take up less space and power to provide services to more companies.

 

Telx’s new facility in Clifton, New Jersey illustrates this model very well. The company took 24,000 square feet of space, in a building that has proximity to networks, but also the ability to handle more customers in a diverse location. The facility, one of the highest broadband penetration markets in the US, is an ideal location for back-up and recovery facilities, those key ‘skyscraper’ customers that maximize space, while attracting businesses that need access to high-capacity bandwidth.

 

In the Clifton facility, Telx has gone out of its way to make sure there are a variety of network options for its colocation customers. The company has interconnected this facility with its three other facilities in the New York Metro market, including 60 Hudson Street and 111 8^th Avenue in New York as well as its Weehawken, NJ facility. This connectivity marks the facility as being one of the most connected facilities with access to more than 400 carriers and service providers – leveraging the ‘cloud.’

 

At the end of the day, colocation facilities need networks, and a variety of them. These relationships are symbiotic, which is why Mzima Networks also relies on colocation facilities that are invested in attracting networks and services to their facilities.