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Colocation Frees Up Various Financial Burdens in Your Business

June 14, 2017
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You still see debates about whether it’s more strategic for businesses to build their own data centers or use a third-party source. It’s a debate you perhaps keep having with your own business team as you weigh the costs of doing either one. Even then, your staff may not completely understand what colocation really is.

When you use colocation, you’re buying space at a data center to store most to all data you acquire in your business. On a security level, this is important because quality colocation centers always have safeguards in place for data asset protection. Further, it can keep your business alive if something happens to your initial business location.

For the financial side, you might miss a few things. Here’s a look at the costs you could overlook building a data center on-site.

Capital Expenditure

Can you realistically build a data center within your business? The capital expenditure you’ll have to spend is tremendous. Most recent statistics show it costs $200 per square foot to build a data center. This doesn’t include $10,000 per mile to lay down fiber optic cable. If you’re out in a remote location, this could become costly.

A big company wouldn’t have problems footing these costs. In a smaller business like yours, this could break you financially.

Using a third-party colocation data center allows you to use equipment already in place to safely store data through the latest cloud technologies.

Ongoing Maintenance

Don’t forget about the maintenance costs of keeping up your own data center. Maintenance isn’t just occasional either. It’ll become an ongoing issue requiring continual resources assuring the technology you use stays working optimally. The last thing you want is even a few hours of downtime.

Statistics show the biggest monthly cost to running a data center is server maintenance. Power distribution and cooling are second, followed by power and networking equipment. Most of these run into the six digits, including server maintenance often hitting over a million dollars.

Purchasing New Equipment

In addition to maintenance, you’ll have to update your equipment eventually. Since technology quickly becomes outdated, you may have to buy new servers and other tools yearly to keep up with demands. Any profits you make in your business could quickly become dashed if you find out you have to buy all-new equipment in order to scale your data center.

By outsourcing this, you’ll be assured the colocation center has the best and latest equipment to allow large data flows.

Hiring Staff

Creating your own data center doesn’t mean it can run through automation. You’re going to need people involved to keep it running efficiently. Hiring an IT staff to keep things monitored means a continual payroll involving more than a few people.

When you hire full-time staff, this could run into many challenges, including take care of unexpected technical problems. Do you have them fully trained to handle emergencies to avoid confusion? Also, can you afford to hire a 24/7 staff to keep things monitored if something happens on a weekend, holiday, or in the middle of the night?

The Real Costs of Downtime

Unfortunately, downtime can cost you a lot more money than you think. One way to prove this is to look at a downtime calculator and see for yourself what the cascading effects are financially.

No matter how long downtime goes with your data center, it’s going to affect all your services, your employees, and basic operations. Through your calculator, you’ll go through employee productivity loss, system restoration costs, lost sales, as well as lost customer and damage reputation costs.

At Accelerated Connections, Inc., we offer colocation for all businesses, plus so much more to keep business data secure at all times.

Contact us to find out more about our services and rates.

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