Colocation can be one of the most cost-effective options for deploying your mission-critical, high-demand core business applications in the long term, as part of a hybrid IT model.
For peripheral applications (determined by your own value and risk analyses), the cheapest hosting option may also be fit for purpose, and this is often public cloud. But for high workload, data-sensitive and business-critical core apps, colocation offers a more robust solution.
And though it may have a higher upfront cost, it often delivers a better return on investment over time.
Of course, working to a technology budget is important. However, decision-making around core business application hosting costs is more multifaceted and strategic, given their critical role in performance and continuity. Predictable and controlled spend and maximising existing investment are often more important than overall costs.
Here are four reasons why colocation may be the more budget-friendly option for application hosting.
1. Sweating your technology assets
Many organisations have made significant investments in hardware purchases, especially servers, on which their core business applications sit. As the need to digitally transform becomes fundamental to business competitiveness and sustainability, these organisations feel they have one of two choices; continue using on-premises infrastructure to get maximum use from the investment, or write off the spend in favour of a move to the cloud.
Colocation offers the best of both worlds to organisations with large core application hardware assets, and can be more cost-effective than other means of hosting in the long term.
Hardware can be placed in a colocation facility, benefiting from a resilient, scalable and high-performance environment, the same as you’d expect to find in cloud platforms (in addition to direct connection routes to cloud services). This means that technology assets can be sweated by virtualising, all while reducing the risk of running core apps on-premises. Outsourcing an IT environment in this may also reduce operating costs, which you can read about here.
2. Predictable and contained network costs
As mentioned, low workload or non-critical applications may be perfectly well-suited to a public or private cloud’s pay-per-use billing model. However, rarely are pay-per-use models the most cost-effective choice for mission-critical applications. By nature, they have larger resource demands. Their workloads and peaks are higher and if an unpredictable event occurs, they’ll likely bear the workload (and budget) brunt as all hands reach for the pump.
As such, stereotypically “cheaper” PAYG cloud platforms become impossible to budget for. You simply do not know how expensive each core app’s resource burst will be, yet have no choice to keep up the demand.
But with colocation app hosting – more expensive upfront as it may be – you don’t experience these hidden, unpredictable and spiralling costs.
Colocation usage costs are contained, predictable and billed on a rolling month contract, with spikes evenly distributed over time to reduce overall resource costs. For high demand, critical apps, colocation can be more cost-effective, and easier to budget for, than dedicated hosting. Colocation also offers predictable power, space and connectivity costs.
3. Geographically-tailored charges
With private or public cloud hosting, your business will usually pay a standardised rate for your specification or usage requirements. But did you know that colocation costs can vary by geographical region, and thus offer a unique fit-for-purpose flexibility that can equate to cost savings?
And we don’t just mean the difference between paying London facility premiums versus the rest of the UK. Sure, a facility outside of the South East – Node4, for example, has 4 data centres conveniently located along the M1 corridor – will likely reflect its lower power and operational costs in its tenant pricing. But network latency (the time it takes for data to travel across a network) is part of the equation, too.
The network latency to reach a colocation facility’s location from your business sites is affected by physical distance. So, by choosing a business colocation facility that’s closer to your place of business, you can benefit from low latency while potentially reducing hosting costs. For those core business apps that are used every day, the geographical control offered by colocation may be a key cost efficiency factor. To read about the benefits of keeping things closer to home, click here.
4. Redundancy and Disaster Recovery
For organisations who need, or wish, to continue deploying mission critical applications on owned servers, IT Disaster Recovery is an overwhelming budget item.
Redundancy is a huge part of this, but the only viable way to really achieve it when using owned hardware is through a colocation service. Colocation facilities usually have N+1 or 2N redundancy; this means that additional components are in place to support a single failure or planned downtime (N+1), or a 100% mirrored system is always on standby or active with concurrent maintainability (2N). Therefore, servers (and the applications hosted on them) will remain highly available should the primary means of deployment fail.
Of course, this is independent to any downtime caused by poor application patching and management, and must not be confused with backup. A colocation tenant is always responsible for arranging backup and ensuring that RTOs and RPOs are adequate, although support can be delivered by an end-to-end colocation provider.
Why choose colocation vs public or private cloud?
Transitioning from managing a server in-house to outsourcing via a colocation facility can be a more cost-effective way to deploy business critical applications. Asset sweating, predictable costs, geographical flexibility and higher uptime and resiliency levels all combine to deliver cost savings for colocation vs public or private cloud over time.
For more about our Tier 3, expert-led, fully owned and operated colocation facilities, click here. Or to arrange a consultation, click here.