In simple terms, colocation (also known as outsourced data center or wholesale colocation) is high-tech real estate. Companies use colocation to solve the problems of hardened data center buildings, power, cooling, telecommunications and security. Companies use colocation to solve these problems without losing any control of their IT infrastructure and systems. Colocation is about control of IT without the worry of building facilities.

Cloud computing comes in many forms. Companies use cloud computing to access applications and resources without owning hardware or maintaining an IT staff . Cloud computing is about applications and solutions without the worry of IT staff, IT infrastructure, and building facilities.

When comparing cloud computing providers, make sure you understand the incremental costs. Simpler pricing models are usually better. Understand the built-in backup systems and redundancies and how you can build in higher reliability if you need to.

When shopping amongst colocation providers, make sure you understand the incremental costs. Simpler data center pricing models are usually better. Keep costs low by choosing a provider with low power costs. Midwest colocation providers tend to have lower data center power costs than other areas of the United States. Affordable colocation is available in many regions of the country. Most companies today look for a minimum 99.995% uptime carrier neutral data centers with no cross connect fees.

Use colocation to maintain control of your applications and infrastructure without the worries of building facilities. Use cloud computing when you’re looking to solve application problems with a minimum of IT overhead.

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Consider the what it takes for 99.995% uptime enterprise data center facilities management:

F5 tornado resistant data center building- for Midwest colocation

Full data center power redundancy – multiple power feeds, generators, UPS systems and rack feeds

Data center cooling redundancy – multiple, concurrently maintainable cooling systems

Physical security – two factor authentication and multiple layers of loggable physical security

Fire suppression – Reliable, industry standard systems with regular testing and maintenance

Data center compliance and certifications – from SAS 70 to SSAE 16, HIPAA, Sarbanes Oxley, FDA, FISMA and NIST certifications are just a few of the standards

Telecomm redundancy – Multiple telecommuncations feeds with separate entrances into the building

These requirements have nothing to do with Information Technology. They are facilities problems. If a colocation provider can take these requirements off your hands, you’re free to focus on data center management of your business, the applications that support it, and your underlying IT infrastructure.

Yes, wholesale colocation providers can simplify data center management. And if you’re selective, you can use the colocation provider to engineer higher data center uptime levels. Look for a wholesale colocation provider that delivers hardened data centers, N+N data center redundancy, multiple carriers, no cross connect fees, and 99.995% uptime. Power billing based on utilization is key. And don’t forget to shop for low data center power costs.

Wholesale colocation lets you stop worrying about data center facilities management.

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1. The Cloud = Business for the Data Center Industry

About once a week I still see goofy headlines asserting that cloud computing is bad news for data centers. The reality, which became crystal clear in 2011, is that the growth of cloud computing means big business for the data center industry. Virtual servers don’t magically float in the clouds. They all live in physical servers, inside data centers. Cloud technologies have driven demand for more efficient data center space that can support higher-density computing workloads. That trend manifests itself in many ways – a hardware refresh, or a data center retrofit, or outsourcing to a cloud specialist, or leasing colocation space or wholesale data center suites. Cloud growth at Rackspace means more leasing for DuPont Fabros, international expansion for Salesforce.com means more business for NTT, and Twitter’s need for impoved latency and redundancy means business for QTS. Not to mention that the data center providers who were most aggressive about moving into enterprise cloud, Terremark and Savvis, were both acquired this year. On virtually all fronts, 2011 was the year in which cloud computing moved from discussion to dollars, and the data center industry was a major beneficiary.

2. Modularity Goes Mainstream

Another technology that saw adoption shift gears was the modular data center. The trend was solidified by a steady stream of announcements of new projects and new customers – something that had been conspicuously absent during the first few years of containerized offerings. It wasn’t just the number of modules, either.

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Your expertise on applications, software architecture, network, server and storage design is not expertise on building tier IV data centers with 99.995% uptime.

Likewise, experts on mission critical facilities like hardened data center buildings, data center power redundancy and cooling are rarely experts on mission critical systems and applications.

A best-of-breed CIO strategy would include expertise in both information technology systems design and highly available data center facilities. How is this done?

If your organization likes to “roll your own” enterprise data center, you probably hire design/build experts to help you accomplish your goals of high data center uptime. Although the capital costs associated with in-house data centers can be enormous, internal data centers offer the highest level of control.

If your organization is considering outsourcing the facilities disciplines, wholesale colocation offers a simple way to offload the “landlord” side of the data center without losing control of the systems.

It’s often best to outsource data center facilities when you’re great at IT but not so great at building data centers.

Midwest colocation facilities like Lifeline Data Centers offer F5 tornado resistant buildings,N+N power and cooling redundancy, and access to many telecom providers. Midwest data centers offer low power costs also give you peace of mind that you’ve done the best job at solving the data center downtime problem using an affordable colocation solution.

Are you trying to be an expert in both facilities and IT? Talk it over with the mission critical facilities experts.

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Your purchasing department would probably say yes. Your legal department might too. One throat to choke. They’re looking at the problem from a vendor management perspective, and fewer vendors is better. Or is it?

Ask yourself these questions:

What if you love the data center facility but the quality of the IT services offered are marginal?

What if you already have vendors for specific IT services?

What if you prefer to choose best of breed vendors for specific projects and technical support?

What if your staff does most of the IT work?

Would it be more sensible to separate the choice of data center provider from the choice of IT services provider?

Most companies that choose wholesale data centers over self-built data centers make the decision based on the uptime they get per dollar spent. That’s because these pure data centers, also known as wholesale colocation, concentrate on one thing: mission critical facilities. 99.995% uptime requires incredible attention to detail with hardened data center buildings, redundant power, cooling, telecom access, and data center regulatory compliance. But not all colocation providers are alike; data center reliability varies greatly based on the companies power, cooling, telecom systems, and compliance. If data center uptime is important, then the sensible approach would be to pick the best-designed facility for your needs.

Does it make sense to reject the best-fit data center facilities provider because they don’t do router work, or AS/400 support, or eCommerce platform support? The answer could be yes. It depends on your organization’s applications and your own staff’s talent in supporting these business-specific applications and their platforms. When considering full-service providers, make sure that you understand the quality of the data center behind the provider’s services. You have the option to pick your own wholesale colocation facility and require your vendors to support the hardware in your colocation space.

If you’re purchasing rack space from a full-service provider, you may be paying too much for your colocation space. Especially if your provider maintains a large staff of IT Support Engineers. Bench time is expensive, and unless these Engineers are fully utilized, your rack space pays for part of the Engineers’ wages. Make sure you consider competitive pricing from other colocation facilities. Data center pricing models are excellent indicators of what vendors value and how they handle their overhead.

Your outsource data center provider does not have to be your IT services provider. You have options. You can choose the best among data center vendors with a little homework.

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The IT outsourcing market saw its first substantial decline in twelve months during the third quarter of this year. Transaction volumes fell for both the IT and business process outsourcing (BPO) markets, by seven percent and 12 percent respectively, according to the outsourcing consultancy Everest Group’s quarterly report on the global services industry. The average contract value of BPO transactions plummeted by 50 percent, while the average contract value for IT contracts increased by 14 percent, thanks largely to three billion-dollar plus deals signed during the quarter.

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Most companies who need new high uptime data center space compare the costs of building their own primary data center in a company building versus using wholesale colocation facilities, aka outsource data centers.

So what does high uptime mean? Uptime is the measured value in minutes of a company’s computer systems reliability. 99.995% uptime means 28 minutes of downtime per year or less. Companies who value uptime know that downtime causes lost sales, lost profits, and lost clients. These companies haveoften learned about the costs of data center downtime the hard way. Some unlikely circumstance caused an outage that was painful enough for leadership to reevaluate the importance of the server room to the success of the company.

But the cost of uptime is high. A small in-house data center with 99.995% uptime can easily reach $1 million in capital costs, and tens of thousands in staffing, yearly maintenance, SAS 70 and SSAE 16 data center certifications.

What does affordable mean? Here are three characteristics:

Simple data center pricing model – Can you understand how the pricing works? Are there multiple add-on charges and mysterious extra monthly fees?

Predictable – Predictable pricing models make it easy to forecast growth and change. How complex is a three year analysis of your costs? Are there multiple variable costs?

Incremental- Incremental means pay as you use it. Can you grow the number of racks and pay accordingly? Do you pay for electricity as you use it, or based on the circuit size?

The good news: you can have your cake and eat it too. You can meet tier IV data center uptime requirements and still keep data center outsource costs low. The bad news: there are only a few Midwest colocation facilities that offer high data center uptime at affordable pricing. Do your homework and you’ll find flexible affordable colocation with high data center uptime.

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IBM, HP, and other established vendors entering cloud computing are often already outsourcing partners to the firms that are now frequently looking for an infrastructure service provider. But that doesn’t mean they have an inside track on the business. They do not.

Established vendors are going to face stiff competition for outsourcing business from the new infrastructure providers: Amazon, Rackspace, and others, according to a report by Pricewaterhouse Coopers.

“Service providers in the IT outsourcing space have, after all, profited handsomely by taking on their customers’ highly complex, one-off collections of IT assets and finding ways to manage them more efficiently than their customers are able to,” states the Pricewaterhouse report.

“But the essence of cloud computing is a move towards highly standardized racks of commodity servers,” with software that manages the racks and allows customers to run applications on them through self-service. “Where’s the IT outsourcing opportunity in that?” said the report, sponsored by Mike Pearl, partner and cloud computing leader at PriceWaterhouse.

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“Demand has certainly increased over the years, pushing the data center to its limits, but the recession has tabled revamp discussions,” she says.

Like many of her peers, including leaders at Citigroup and Marriott International, Kossuth has had to get creative to eke more out of servers, storage and the facility itself. To do so, she’s had to re-examine the life cycle of data and applications, storage array layouts, rack architectures, server utilization, orphaned devices and more.

More of the Computerworld article from Sandra Gittlen

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Meanwhile, Indian and American IT outsourcing providers are entering new markets with both low-end, commoditized services—a highly competitive field with few barriers to entry—and higher-end services where market entry is more challenging, say the researchers. It all adds up to a perfect storm for many large IT outsourcers, says Arie Lewin, director of CIBER and professor of strategy and international business.

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