I recently went to visit a friend of mine in his new offices. He proudly showed me the well-stocked kitchen, collaborative work spaces, and his bright new office. Wrapping up the tour, and because he knows my line of business, he showed me their in-house data center. The cooling fans were whirring and lights were blinking. It was all very impressive, but I couldn’t help but think about their proximity to floodplains, the lack of multiple carriers and power sources into the building, not to mention their electric bills. This isn’t an uncommon scenario and for many companies, an on-premise data center, such as the one I described, coupled with the cloud may seem to make the most sense. With the shift of many workloads to the cloud, a flexible, highly connected colocation environment is rising in value for many organizations.

Economies of Scale

Whether you’re in the cloud or not, the economies of scale that can be realized with colocation should not be overlooked. Power and bandwidth carrier redundancy as well as industrial power rates and cost per square foot can be reduced when colocating in a data center facility. In addition, many of these facilities have direct connections to the public cloud as well as a host of other carriers to make transit and interoperability between physical and virtual environments much easier (with less latency) than from an on-premise data center.

Room to Grow (or Shrink)

If you build your on-premise data center for 10 racks but expand beyond that as you grow the cost of expanding that data center can be prohibitive to growth. On the flip side of that, as the cloud becomes a more and more viable option, organizations are turning to virtualization for some of their physical infrastructure and must shrink their data center footprint. Also no easy task when it’s been custom-built and keeping a data center operating while only filled to partial capacity can be a serious money pit. With colocation, you’re only committed for the time you’re contracted and you can work with your provider to grow or consolidate your footprint by as much or as little as you need.

Resource Optimization

The cloud is great for many, many purposes, but it can also be very, very complicated. Colocation frees up your IT staff from tending to the servers and allows them to focus on the more strategic needs of their IT infrastructure. The power is on, the connection is up, the coolers are cooling, and you have strong SLAs in place to ensure that is no longer a worry when in a colocation data center. For many, including Fidelity & Guaranty Life, this has been a way to focus their infrastructure experts on more important work.

The cloud is here, it’s not going anywhere and for many companies it’s an indispensable part of their infrastructure. Colocation give those who need to retain physical infrastructure many of the benefits of the cloud in a hybrid environment.