The current state of the colo market – Insights from Tim Anker

More and more businesses are choosing to colocate as they seek answers to limited computing power and flexibility issues within their own server rooms. They also want to make sure they are housing their IT in a secure and resilient environment, which means they need to make informed choices when selecting a colocation provider.

Recently we caught up with Tim Anker, founder of specialist brokerage firm Colocation Exchange (Colo-X), to ask him what the growing number of colocation providers are offering. Tim’s been in the business since 1999 and is highly experienced at helping buyers find out which providers will be best suited to them. As such, he knows more than most about how businesses can take advantage of all the benefits that colocation offers.

Why do companies you work with want to move towards colocation?

Tim: There are many different drivers. Office relocation is a big one. Organisations often see it as an obvious time to take the opportunity to finally move their IT into a third party environment specifically designed to house it.

Other times you will see people look at colo as an option is when they’re going through mergers or demergers. Then there’s moving to a new hardware platform, adopting virtualisation or third party cloud services. These can be triggers too.

How do you think companies can try and make their colo transition as smooth as possible?

Tim: Obviously we don’t actually do the transition ourselves. We help people choose the right provider. But what I would say is that in the initial stages, it’s very important that organisations figure out how to present their full IT estate and network needs to potential suppliers. If you get that right upfront, it’s more likely that a smooth transition will follow.

How can organisations ensure they get the best deal?

Tim: The network side of things is an important aspect to consider. Do you want to go with a particular carrier for the connection to the facility, or are you open to options? If you’re open to options you’re likely to get a better deal. There are a few other things to consider. For example, going for a lower number of high power racks in today’s modern facilities can often mean get you a better deal than a higher number of low power racks.

Everyone likes value for money, but our customers tend to be much more bothered about factors like physical location, the quality of the facility, the range of services the provider offers, whether the provider is a good fit for the size of their business and whether they offer 24/7 technical support. The financials tend to fall out at the end.

What do you think companies should expect from colo providers in terms of support?

Tim: I just think providers need to be prepared to work really closely with the buyer and do everything they can to ease the challenges of moving your IT.

They should also be helpful and willing to open doors. For example, a good colo provider will usually ask what your network requirements are and offer to introduce you to the most appropriate carriers, rather than leave this critical aspect to yourself.

There’s no one size fits all solution. The key thing that I would look for is the right approach from the supplier. Have they got that ‘roll your sleeves up’ kind of approach where they’re going to make it happen, or are you dealing with a really big company where the sales guy’s not interested in talking to the ops guy? There can be a bit of a disjoin when that happens.

Some of the smaller operators can actually be much more flexible and helpful, while some of the larger companies are very system led.

So what other services and benefits do you think colo providers should offer?

Tim: Well there’s the basic IT environment itself, and offering a 24/7 remote hands technical assistance service is also important.

These are the two basics. Making billing really easy is also imperative; I’ve seen some billing that is really complex and not helpful to anyone.

A lot of providers now offer a lot of added extras as well including full IT support and break/fix. You need to work out if that’s right for you though or whether you actually just need a more basic service. There’s a full spectrum of providers to choose from now.

What do you think is coming next for colo?

Tim:  We’ve just done a big report on the London market, which is easily the biggest in Europe – almost bigger than the Paris, Frankfurt and Amsterdam markets put together. We’ve seen a lot of takeovers and general change in the market recently, creating bigger providers and I think that trend will continue.

In the background there’s also been a massive surge in demand for the big cloud service providers like AWS, Azure and SoftLayer. That’s made a massive impact, and led to some changes in market structure and dynamics.

Cloud operators are also offering very widely dispersed open access models where you don’t have to be in the same facility to access that service on a low latency basis. You can now access them from anywhere over dedicated links, and there’s a whole host of providers providing those links.

It will be interesting to see what the long term impact of cloud will be and how it will change the data centre market dynamics even further.

And your final word?

Tim: There are some dominant players in the market right now, especially after all of the recent takeovers. But what I think people need to remember is that there are also still a lot of really good quality, customer focused independent operators out there, who still make up about 50% of the market in London.

They are important for maintaining diversity in the market and offering different levels of service. People shouldn’t forget that.

Tim's answers align perfectly with a lot of data centre managers' thoughts on colocation, as highlighted in a recent report by IDG. Download your copy here.