Downtown is the trendy place to be. No matter what city you live in or near, the downtown area is where everything is concentrated. You have businesses, clubs, restaurants, activities, stadiums, events- everything you could possibly want is downtown. Because downtown is so central and so concentrated, it's where everyone wants to be- including data centers and collocation facilities.
The High Price of Downtown
But downtown comes with its own host of problems. The main disadvantage of downtown is the high cost of real estate. Everyone wants to be there. And because of this, companies have to pay a premium to locate downtown. If rents rise, people are either forced to pay higher rent or leave the location that they perceive to be prime.
Unfortunately, this doesn't help the consumer, especially when it comes to data centers and colocation. Because these facilities are so specialized and require so much energy, power and infrastructure to run, they're not likely to move locations if rents are raised too much. In fact, it would be a disadvantage for downtown data centers to do so because of the costs associated with moving an entire data center and the inconvenience it would cause for the customers.
So, when rent goes up, colocation facilities are forced to pay. In order to make up the costs, prices are raised or services are cut in order to maintain the same margin.
The Best Deals Aren't Downtown
If you're looking for the best deal on colocation, downtown is not the place to look. The farther away you get from the city, the less expensive real estate is. There are many reasons for this, but the point is that data centers don't have to pay the high premiums for real estate. Without these excess costs for rent, facilities are able to pass these savings onto customers. Not only can they offer cheaper prices per rack, but they can also include more bandwidth and more services. By locating away from downtown, you'll get at least the same quality of service and in many cases you'll get better service without having to pay the high prices that you do downtown.
A sample price comparison of a facility located just outside the city center and a facility located right in the heart of downtown is as follows:
½ Rack- $650 (Does NOT include traffic)
Full rack- $1200 (Does NOT include traffic)
It is not possible to rent space in any smaller amounts. It's pretty much all or nothing, which doesn't accommodate the needs of smaller businesses or allow for gradual expansion. Other services include a power generator (which belongs to the building and therefore they don't have complete control over its usage) and 100mps ports.
Facility near, but not in, downtown-
1/8 Rack- $175 (includes 50 GB traffic)
¼ Rack- $350 (includes 200 GB traffic)
½ Rack- $500 (includes 350 GB traffic)
Full rack- $900 (includes 800 GB traffic)
Other features include a power generator which is owned by the company allowing more control, owning their own facilities, 100 mbps ports and free internal traffic with an internet account.
Savings Passed on to You
As you can see, facilities that are not located downtown can afford to pass on the savings to customers. Not only is it less expensive to rent a rack, but it also comes with more features, such as included traffic and free internal traffic. Not only that, but hosting away from downtown will save you on other costs you may not even have thought of such as not having to pay for parking. All-in-all, regardless of where you're located, it's always much cheaper to host your servers outside of downtown than it is to host them right in the heart of downtown.
Saleh Tousi is the CEO of SmarttNet, a Vancouver IT company offering comprehensive business Internet services including Canada Collocation since 1995.
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