How to Select the Right Colocation Provider and Data Center?

29 May 2020 by Bart Dorst

Whether driven by finances, personnel and resources, disaster recovery planning or merely wanting to concentrate on core competencies, many businesses are choosing to relocate their IT infrastructure in third-party data centers operated by colocation providers. Colocation is an attractive alternative to hosting mission-critical servers and storage in on-premise telecom closets and data centers.

Why? Most businesses have discovered that in-house data centers will not accomplish their availability, reliability, connectivity, and power requirements which are critical to both IT and business strategies. Furthermore, the benefits of relocating servers to a colocation facility include decreased capital costs, greater reliability, simpler management, and fewer resources dedicated to managing and troubleshooting common data center infrastructure tasks.

However, making the decision to relocate from an internal data center setup to an offsite colocation data center is not always an easy one. The mere thought of relocating servers, storage, and networking gear requires substantial planning and careful consideration. The apprehension that comes with change is often the largest roadblock in relocating a data center.

Once a company decides to make the transition, it takes a clear strategy on how to determine the right colocation provider, data center facility, and services for supporting your hardware remotely. To determine the best approach for their business needs and goals, companies must take five key considerations into account.

1) Define Your Goals & Objectives

Technology that supports business goals and the data center supports the underlying technology. Therefore, businesses should clarify what their long term goals are and what they represent for everyone involved with the technology. Various departments may have different goals and objectives that will impact the data center strategy. Download this free Colocation Buyer’s Guide from Datacenters.com

The first step is to get everyone involved on the same page. That includes identifying all of the stakeholders. It’s important to have a diverse cross-section of employees that can weigh in on the general strategy, goals and objectives. This group of employees should encompass senior leaders as well as subject matter experts such as SysOps, DevOps, SecOps, admins, and software developers. This ensures that all of the perspectives and data center use scenarios are analyzed. By way of instance, upper management may not be aware of problems technicians encounter, such as insufficient monitoring and alerting tools for your network.

Stakeholders' goals need to be longer-term, high-level items they want to achieve, such as enhancing data center uptime or reducing time spent running a data center. Their aims are short-term landmarks that support every one of their goals, be measurable, and contain particular start-to-finish timelines. Every stakeholder must then rank these goals by importance in meeting the overall objectives.

Following the interviews with aims and objectives identified, the very next step is to bring stakeholders together and form a consensus on what the most important data center related goals and objectives are. From there, the group can brainstorm the strategic execution of how these goals and objectives can be attained, setting the platform for a comprehensive data center strategy.

2) Research Colocation Providers & Data Centers

After goals and objectives are defined, discussions should shift to determining the process for selecting a colocation provider and data center facility. There are varying levels of support provided by colocation providers for their clients. This ranges from the minimum of rack space, power and connectivity to fully managed colocation services.

Another major consideration when selecting a colocation data center is located. What is the purpose of the data center relocation? These goals back to the goals and objectives identified above. Is the goal of relocating to a colocation facility for disaster recovery? If so, the location of the data center may be in another city or state. If the goal is reliability or performance, most businesses look to colocation providers and data centers located near their headquarters or branch office. In this case, proximity to the IT personnel responsible for managing the hardware should be within a reasonable driving distance.

Not all data center facilities are created the same. There are many different types of data center facilities from purpose-built to retrofit, single-story to multi-story. There are also different tier levels that signify the number of redundant systems built into the data center. The Uptime Institute rates data center facilities on a scale of 1-4 with a Tier I data center being the lowest in terms of uptime and redundancy and a Tier IV data center being the highest. Datacenter redundancy plays a major role in the amount of downtime expected each year. Scheduling a data center tour is the best way to compare data center facilities.

Businesses may also heavily weigh the connectivity options at the data center facilities they are interested in. This includes on-net telecom carriers, ISPs, and network providers that are already integrated within the network architecture. Further, cloud direct connectivity to major cloud providers like AWS, Google Cloud, Microsoft Azure and IBM Cloud will also be an important consideration in the decision-making process.

Last but not least, many businesses will take into consideration a general budget of how much they would like to spend on colocation services. It will also be important to consider the contract term. Is it a 1, 2, 3, or 5-year term? What are the long term technology drivers? Will the business focus on a hybrid infrastructure approach or will it move 100% to the cloud by a certain date?

3) Define & Write Your Colocation RFP

Now that you have created a list of finalists for colocation providers and data centers, it is time to develop a request for proposal (RFP). The purpose of an RFP is to get standardized answers and responses from each of the providers. This allows for side-by-side comparisons and empowers your business and leaders to negotiate based on the responses. Building an RFP that addresses your specific business requirements is essential for locating the right colocation provider. Download this Colocation RFP Template from Datacenters.com.

What does a colocation RFP include? Beyond a company background, an RFP includes clear instructions on what information providers should include in their proposals. This may include mandatory requirements, an estimate on the initial variety of cabinets, and the power necessary to support present and future growth requirements.

Additionally, it is key to provide colocation providers the opportunity to describe all aspects of their offering, from electrical infrastructure to how they handle deliveries. The RFP should also request information relating to pricing and provisions, sample agreements, compliance and certifications, and more.

Other questions that you can ask is when the data center last experienced downtime.

 - Why did the data center go down?
-  Was it a power outage or network failure?
-  What was the cause?
-  How did the redundant systems such as UPS and backup generators respond?
-  How long did the data center downtime last?
-  What is the history of downtime?

These questions will help you determine the risks of going with a particular colocation provider or data center facility. It is important to realize that data centers are typically built for redundancy and offer significantly better reliability than office buildings.

4) Review RFP Responses & Proposals

Evaluating provider responses can take even more time than defining requirements and writing the RFP. Once all of the responses are received, it is important to make apples-to-apples comparisons to determine the ideal colocation provider for your business and technology requirements.

This can be a daunting task. How do you compare all of the providers? Which one is the best? One way to compare each response is to create a weighted score matrix. You can do this by creating a matrix spreadsheet of all colocation provider finalists and the questions from the RFP. Each colocation provider is scored based on their answers to the questions. You can weight certain questions more heavily than others. The total overall score can be tallied at the bottom of the spreadsheet for each provider.

Another way of comparing providers is to ask additional questions for clarification. Follow-up questions can help you understand outlier proposals, service offerings and pricing. Some providers may offer additional services or recommendations. It is important to understand the differences.

Collaboration among stakeholders and decision markets in this part of the process is critical. Make sure to involve them as the proposals come in. Also, make sure to share the matrix or a summary of the RFP responses.

5) Finalist Selection & Negotiation

You are down to one or maybe two colocation provider finalists. What’s next? Negotiation of pricing and terms should be next on your list. The colocation RFP process allows you to compare providers and services on an apples-to-apples basis. It also creates leverage to negotiate terms and pricing of those service offerings.

You can request contracts and finalized pricing at this point. Make sure to read through the contracts carefully and engage legal for review and redlines if possible. Highlight any gotchas in the contracts such as automatic renewals, SLAs, initial deposits, length of the contract, move-in dates, and other details. For the majority of colocation providers, contracts can be adjusted to meet the requirements of the client.

Final pricing can also be negotiated. Some providers are flexible on price while others are not. You also have to take into consideration the data center facilities and their differences such as tier level and location.

We’re Here to Help With Your Colocation RFP

Need help writing or managing your colocation RFP?

At Datacenters.com, we offer a digital colocation RFP with an easy-to-use wizard that guides you through each step of the RFP process as well as a traditional RFP template for colocation. Leverage our in-depth expertise and market knowledge to get the best colocation provider and data center for your project. It’s a free service and we connect you directly with all of the major colocation providers such as Equinix, Digital Realty, CoreSite, Cyxtera, Flexential, Cologix, QTS Data Centers, DataBank, Evoque and more. Contact me, Bart Dorst, Global Technology Consultant, today to learn more.

Author

Bart Dorst

Bart Dorst is a data center and cloud consultant providing tactical solutions for businesses for over the past 10 years. His specialties including colocation, wide area networks, internet connectivity, cloud direct connects, data storage and backup, disaster recovery, cloud computing - IaaS, SaaS, and DRaaS.  

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