How Colocation Services Affect IT Cost Reduction Strategies

By: Alan Seal on April 22, 2020

Today’s organizations rely on their IT infrastructure to deliver goods and services to their customers. Finding a way to keep innovating and incorporating the latest technology trends is essential for building prolonged success. The pressure to achieve a true digital transformation, however, often comes up against the very real demands of IT cost reduction strategies.

The Importance of Implementing IT Cost Reduction Strategies

Getting a handle on IT costs is one of the central problems facing many CIOs. This is especially true of organizations that have gotten to where they are with their existing IT infrastructure, but now find themselves having to make some difficult choices about how they want to increase their functional capacity in the future.

In-house data solutions, whether it consists of a few servers in an office server room or a dedicated, private data center facility, are typically classified as capital expenses (CAPEX). There are plenty of advantages to having a totally in-house solution, most of which are related to control over that infrastructure and network configurations. When the time comes to expand capabilities, however, growing beyond the status quo can quickly become prohibitively expensive.

Today’s technological innovations are coming so quickly that it can be difficult for organizations to keep up without constantly updating their network systems to accommodate them. That means ongoing investments in new equipment and software. Without a good IT strategy, companies can find their costs spiraling out of control as they struggle to keep up with new developments and dedicate more IT resources to simply keeping their infrastructure running smoothly rather than devoting time to developing the innovative services that will deliver a competitive market advantage.

5 IT Cost Reduction Benefits of Data Center Colocation Services

Data center colocation services provide an ideal solution for many organizations looking to reduce their overall IT costs by transitioning from CAPEX to more manageable operational expenses (OPEX).

1. Improved Power and Cooling Efficiency

Most in-house data solutions tend to be quite inefficient due to poorly designed cooling infrastructure and inefficient workload usage that results in server sprawl. Many private data centers are housed in repurposed structures that were never built to accommodate the power and cooling demands of modern computing equipment.

Placing servers within a colocation facility allows companies to leverage the power and cooling efficiencies of a purpose-built data center that utilizes the latest in energy-efficient technology. This ensures that companies don’t end up consuming more power than they actually need, which helps limit overall OPEX outlays over time. Sophisticated intelligent monitoring technology like vXchnge’s award-winning in\site platform can provide colocation data center customers with even greater visibility into their power usage than they could get from their own in-house solution.

2. Improved Security

Data breaches represent one of the greatest risks facing today’s companies. With data collection and analysis becoming so central to the ways organizations service their customers, they can’t afford to take any chances when it comes to keeping that data secure. Implementing the high levels of security that modern IT networks demand, especially with the rapid increase of remote working, is often beyond the capabilities of growing firms.

Colocating assets with a data center allows these companies to effectively jump-start their security posture by housing their IT assets in a secure, state-of-the-art infrastructure that meets a variety of compliance requirements. This is incredibly important for implementing zero-trust security access policies and managing the potential for insider threat and human error. Colocation data centers also offer a variety of secure connections through direct cloud on-ramps to ensure that sensitive data isn’t exposed to the public internet.

3. Improved Uptime Reliability

Losing data and application availability for any reason can be a catastrophic moment for an organization. As more and more companies shift to leveraging a remote workforce, it’s more important than ever that their essential network systems remain up and running as much as possible both for internal use and customer access. This is especially critical for cloud providers that deliver online services. When customers are unable to access services, there is a good chance that they will seek out more reliable solutions elsewhere. This combination of lost revenue, missed opportunities, and diminished brand reputation can be devastating for a growing company (and an established one).

Colocation data centers can deliver reliable and redundant infrastructure backed by high service level agreements (SLAs) to ensure that essential systems and services stay up and running. They can also help companies mitigate risk through disaster recovery services that back up mission-critical assets, allowing them to retain access to their valuable data and applications even if their primary data center is unavailable.

4. Improved Support

Managing a state-of-the-art data solution can become both costly and time-consuming very quickly. Most organizations find themselves forced to make a difficult tradeoff by dedicating their limited IT resources to keeping network services running smoothly at the expense of developing innovative new services that will enable the company to win more customers and continue growing.

With data center colocation services, they no longer have to make this choice. Thanks to the combination of intelligent monitoring software and remote hands support services, colocation customers can leave the day-to-day management of their IT assets to the capable, dedicated hands of data center professionals. This frees up their internal IT team to focus their attention elsewhere, prioritizing high-value work that will help the company stay ahead in a competitive market.

5. Improved Flexibility

While there are some advantages to investing in an in-house data solution, the CAPEX nature of that investment ultimately imposes severe constraints upon an organization. Growth is always limited by available resources. Adding more capacity is difficult and repurposing existing infrastructure to take advantage of new opportunities isn’t always possible. If the company wants to scale its network services, it will need to make sizable investments in new hardware. Even worse, by the time that hardware arrives and is ready to be installed, the opportunity for growth might have passed.

With data center colocation and the constant availability of direct cloud on-ramps, companies always have the ability to “right-size” their IT systems to meet existing demand and capitalize on existing growth. They also have access to a range of additional services through data center managed service providers (MSPs) who can implement new solutions that deliver even greater flexibility.

Stretch Your IT Budget with vXchnge

With multiple data center locations in key emerging markets across the US, vXchnge provides industry-leading colocation services that allow our clients to complete their digital transformation. Our data centers are engineered for perfection with extensive redundancies and are backed by 100% uptime SLAs and 24x7x365 remote hands services. The in\site intelligent monitoring platform delivers unprecedented visibility into colocation deployments, allowing customers to continuously monitor their power and bandwidth usage to ensure they’re meeting their IT cost reduction strategies. To learn more about how vXchnge can transition your IT budget from restrictive CAPEX to more flexible OPEX, talk to one of our colocation experts today.

Speak to an Expert About Your Company's Specific Data Center Needs