Good Opportunities for Selling Colocation

In our line of business, it’s nearly impossible to make it through a work day without reading an article about how IT spending on cloud is accelerating or how more workloads are being moved to cloud environments. We all know how great cloud is and the benefits it can bring to a business, but contrary to popular belief, it’s not always the sole answer. In some cases, including colocation is necessary to ensure the best business outcomes for your customers.

According to IDC, by 2018, 65 percent of all IT infrastructure will be located in cloud or colocation data centers. As a trusted advisor, knowing when to suggest colocation is a good way to build trust with your customers. When talking with them about cloud, keep an eye out for the following situations. Chances are colocation might be the better fit for their end-user experience.

The Customer Has Mission-Critical Legacy Apps

Gartner analyst Lydia Leong says, “not everything can or should be cloud.” With this, she is referring to mission-critical legacy applications. Because these were developed before the widespread adoption of hosted virtualization, they’re built with dated architecture and can’t perform to their fullest potential in a virtualized environment. Many businesses are still using these applications because replacing or rewriting them is too time consuming, or they can’t reliably migrate the data hosted in the application.

Additionally, many CSPs use a standardized virtualization setup software that legacy apps have trouble integrating with, making them perform less efficiently. If they are inaccessible for any amount of time, it could be detrimental for a business’s productivity, so they must be housed in an environment in which they can be seamlessly accessed at all times. This means that there can’t be any latency issues, and there most certainly can’t be any downtime.

In this scenario, it’s best to advise the customer to rent rack space in a colocation data center to host legacy apps. Many of these sites are carrier-neutral, meaning you can choose the connectivity that will ensure your customer reliable access to their mission-critical apps. Most importantly, they control the virtualization and maintenance of the entire environment, allowing them to better ensure their legacy apps run well. They won’t need to worry about rewriting apps because they’re using the same hardware as before, just keeping it off site.

The Customer Needs to Adhere to Strict Compliance Regulations

Many businesses face IT compliance regulations, especially in the healthcare and finance verticals. It’s critical for them to ensure the security of apps and data because they can face hefty fines and legal repercussions if they don’t. Because of this, adhering to these regulations is a top priority. In fact, a DCD Intelligence report states that 37 percent of users are inclined to fire their data center provider if security compliances are not adequately met.

Although many cloud service providers include robust security options in their offerings, often times the perceived safest strategy for businesses with high security needs is to host those sensitive resources in a colocation facility. On its own, cloud makes it difficult to maintain compliance because the infrastructure, and the data within it, is susceptible to interception or modification. Colocation, on the other hand, allows businesses to host this sensitive data offsite in their own encrypted, secure servers. This equipment is not shared with other businesses and, to some degree, obliges their security protocols.

servers.jpgBe advised that this option is most suitable for businesses that have a team of IT compliance experts that have vetted their technology and processes. Some colocation facilities do offer onsite engineers as a white-glove service, but these individuals are only called upon for assistance with severe issues.

The Customer Simply Isn't Ready for a Full-Fledged Cloud Environment

Despite the undeniable benefits of cloud, there are companies out there that are hesitant to incorporate it in their IT strategies. This rejection can be due to the fact that they are still running mainframe systems and are unlikely to leverage cloud unless they replace their apps. It may also be an issue of costs. Their equipment has not fully depreciated, so they will not move to cloud until the savings are greater than the tax they need to pay to break from depreciation.

With this type of environment, the customer still benefits from reduced costs. In fact, the biggest expense is the provisioning of hardware. However, if the customer already has the equipment, colocation can be fairly affordable because a full cabinet can cost as little as $600 per month. This is generally less expensive than a full-fledged cloud environment, making it more appealing to businesses that want to host data and apps offsite, but don’t want to pay cloud prices until their equipment depreciates.

While cloud is being adopted at a steadfast pace, there is still a large need for colocation services. Although it isn’t as glamorous as cloud, it still presents significant opportunity in the channel. Work with TBI to help your customers with their data architecture and recommendations for hybrid IT solutions.


About the Author
Adam Dawson is TBI’s Marketing Communications Manager. As the organization’s wordsmith, he is responsible for creating engaging content and carrying out internal and external communications programs. This includes circulating information to TBI’s agent partners, educating them on hot topics in the industry, and guiding them to the best provider products and solutions for their portfolios. You can reach Adam at adawson@tbicom.comor connect with him on LinkedIn.