Businesses aren’t the only ones looking to benefit from colocation services. Several cloud computing providers are making the decision to lease space in a colocation facility instead of purchasing or building their own data centers. The cost associated with constructing and managing a data center is significant, and many cloud providers aren’t interested in making the investment.
According to Reed Construction Data, the cost of building a standard one story 22,500 square foot data center starts around $7 million dollars. For many start-up cloud providers, they simply can’t afford to build or outfit a data center. Even the larger, well established cloud providers are opting to lease data center space instead of building or buying their own.
Most cloud providers are choosing to lease space because they need an efficient and robust data center to deliver their service. By utilizing colocation, providers are able to focus more on other aspects of their business, such as advertising or customer service, instead of spending money on hardware, power, or cooling facilities. Providers need to stay current and utilize marketing to establish a competitive edge in order to compete with the hundreds of cloud establishments in the marketplace.
Colocation also offers the opportunity to reach globally dispersed customers quickly. Instead of building an entirely new data center facility, cloud providers are able to lease space in multiple data center locations. This gives them a great deal of flexibility because they are not limited to a single location. It also provides them with a larger target market because they are no longer confined to one geographical area.
Utilizing colocation to deliver cloud services is quickly growing in popularity as more and more providers recognize the benefits. Although building or buying a data center facility may still be the right strategy for some cloud providers, colocation is making it easier for start-ups to enter and compete in the cloud market.
To learn more about the benefits of colocation, click here.
Blog Author: Vanessa Hartung