Colocation Costs That Work With-in An IT Budget

One of the overlooked aspects while choosing the right data center is the Total “colocation” Costs of Occupancy or TCO. Each company has specific needs and a budget, and the two must synchronize. For this to truly happen, the company must carefully conduct a detailed and thorough cost analysis of its own IT costs which will help determine the requirements for the data center expenses. The budget is the factor that will decide how much redundancy one can afford to build into the solution. Typically, the more redundant the environment is, the more expensive it will be and the colocation costs budget will greatly depend upon it.

Colocation Costs And Budget Containment for IT

Colocation budget costs

Colocation Budget Costs

The up-front NRC (non-recurring costs) cost and future MRC costs (monthly recurring costs) should remain within the allocated budget for data center expenses. These should include the cost for installation, moving or deploying, testing, operating, power, data services, expanding and maintaining. Usually there are two types of data center expenses:

  • a one time capital resource cost that include equipment purchases, parts upgrades and refreshing equipment as technology changes, purchases of spare equipment, and setup fees;
  • and recurring expenses that include the cost of space (per rack or per square foot cage costs), a cost per voice or data circuit, the cost of bandwidth, cross connect fees to ISPs or Carriers or NSPs, managed services, additional costs for remote hands services, future space reservations, taxes, insurance and travel expenses.

The most important portion of this objective is to determine how much it will cost if the infrastructure is down. This may result in the loss of revenues, damage to reputation, decrease in productivity, and even the loss of credibility.

Colocation Costs And Term Contracts

The data center providers charge differently for their services for month-to-month contracts versus multi-year contracts. Longer term contracts can provide significant incentive pricing for lower up-front charges and monthly recurring charges. This should also be worked out when defining the data center budget for incurring expenses. Although some data center providers claim the best service for a low price, one should deeply analyze these services and whether they are serving the requirements and needs of the company or not. For instance, a data center provider might get you up and running for a 15% lower price of another data center provider, but their technical support and troubleshooting services doesn’t exist beyond minimal support. So, an important question is how one company can offer the same quality service at a lower price of the other? Therefore, it is important to know the detailed services and cost information with their service offering causing you to focus on each critical detail in writing.

Choosing the correct data center provider is not a simple decision. Your company budget is a key factor but it all depends upon the needs and requirement of the company; as the redundancy, services and facilities in a data center will increase so will be the cost. The only and the best approach is to choose the best data center partner that serves all your needs and still remains within your allocated budget.  is a free service provided to clients for selecting the right data center, colocation or cloud facility for their requirements. DataCenterAndColocation is one of the largest colocation site consulting firms in the United States. They represent approximately 3000 data centers and colocation centers. At no cost to clients, they identify specific space, location, power and security requirements, solicit proposals, professionally analyze the responses, compare the strengths and weaknesses, negotiate pricing and deliver highly competitive bids for colocation. They also perform comparative analysis for in-house vs. design build services, wholesale data center space and data connectivity.