Managed Colocation Pricing: Nine Factors That Influence the Pricing
Managed Colocation Pricing is a somewhat complex subject to grasp for beginners. Many companies opt for colocation hosting to cut down on the costs of owning and operating their own data centres. But they often misunderstand the pricing and end up frustrated due to unexpected expenses.
This happens because there are numerous contributing factors in the colocation fee. Unfortunately, decision-makers during the buying stage are not aware of all of them. This post from Grid Hosting is here to solve the same problem. Anyone can feel the pain of putting effort into searching for a UK cheap colocation only to find out it is more expensive than you can think.
People usually use hardware or physical space to estimate the price. However, full rack colocation pricing is not the only criterion while buying a full rack. There are a lot of other aspects.
Nine Factors That Influence Managed Colocation Pricing
We will be covering all the aspects that are imperative to colocation pricing. This is no generic post about what is colocation hosting.
Instead, it is supposed to be your colocation pricing calculator. We will be discussing all the factors so you can self-estimate the price before you buy it.
Location is a key factor, be it unmanaged or managed colocation pricing. Expensive real estate increases the hosting prices. The facility downtown will be much more costly than the one in a rural area. But on the other hand, urban areas have their own pros.
For example, they are closer to airports, highways and most importantly, the using organizations. The longer distance of suburbs may result in higher latency and lower performance.
Moreover, prices may vary from city to city. For example, colocation London prices could be quite different from that of Birmingham.
2. Physical Space
The amount of space you rent from the facility is an essential factor. The size is measured in rack units or square footage. Therefore, 1u colocation pricing is lesser than 2u colocation pricing.
The cost of this designated space reflects a portion of the building operating expenses, such as ongoing maintenance and data centre security. Some companies, however, charge based on allocated power.
Any special space requirements or customizations that affect power, cooling or ventilation can increase costs. Moreover, some organizations might require a private cage or suite that provides a lockable enclosed area for their equipment.
You may bring your server to the facility, or lease equipment, but that has no relevance with colocation renting space. Several other factors can add to this hardware cost, such as:
- Lease/Purchase Other Equipment like cages, cabinets, or racks
- The facility may require special racks that exchange heat or reduce noise
- Power Distribution Units
Many people think hardware is the only point required for colocation pricing comparison. That is not the case.
Multiple variables can affect this significant portion of colocation costs. It may depend on how efficiently your providers use electricity. There are expenses of cooling a customer’s hardware and running other HVAC components that increase the customer’s power costs.
The continuous availability of power and cooling is imperative. Providers have to maintain the power infrastructure and arrange the backup generators. The exact formulas required to get UK colocation pricing may vary from company to company.
5. Connectivity & Bandwidth
It is an essential requirement to connect to other parts of the data centre or outside networks. However, that may come with a one-time installation fee or even monthly charges.
Moreover, companies may need additional or dedicated IP addresses or want to establish connections with multiple cloud platforms, either of which can add to overall expenses.
Also, companies have to pay for the bandwidth they use at colocation facilities. These requirements depend on the deployed applications and their supported workloads. Bandwidth is the amount of data that you can transmit in a specific time interval.
Some companies offer blended bandwidth services. They provide broadband services that span two or more carriers. If one fails, the other jumps in automatically. That increases the managed colocation pricing.
6. Setup & Change Fees
Setup and change fees are charged for specific operations. It could be setting up cross-connects, hooking up new servers, discontinuing equipment or adding monitoring or reporting. Unfortunately, companies are not very diligent in explaining these charges. On the contrary, they make them harder to grasp by grouping multiple services into a single entry.
Setup and change fees can add significantly to the base rate. Make sure that you fully understand what to expect when assessing a facility.
7. Disaster Recovery
How does any company ensure uptime? They implement redundant systems that provide fault tolerance. They could be redundant utility feeds, diesel generators, automatic transfer switches and UPS battery backup systems. They may install redundant cooling equipment or network switching gear. All of this comes at a price. During your survey, determine the level of disaster recovery and fault tolerance that workloads and data of that organization requires. Pick the one that meets or exceeds their needs.
8. Security & Compliance
Some companies search for colocation facilities that meet specific compliance regulations. For instance, an organization that handles medical data in the U.S. would likely seek out a facility that meets HIPAA requirements.
The facility plays a role in meeting HIPAA’s requirements for protecting the physical environment. But, of course, complying with these regulations can raise the data centre’s operating expenses, which means the customer pays more.
Your IT team has to deploy and maintain hardware themselves until you opt for fully managed services. However, this is not a practical approach. Instead, you can pay for the services of remote hands or on-site technicians to carry out specific actions.
These remote hands can do a lot of stuff, from setting up equipment to installing software to replacing cables. Some colocation companies charge a minimum monthly fee for that, which is an add-on to regular charges. Others charge on an as-needed basis when the services are rendered.
Putting It All Together
It is all about asking the right questions. Ask your colocation provider in light of these nine points to better understand your managed colocation pricing or the unmanaged one before you buy.
At Grid Hosting, we provide quick and secure colocation server solutions. Feel free to drop a message if you are interested or have a question about this post.