By Darren Watkins, Managing Director of VIRTUS Data Centres

A few years ago, you may have heard it said that colocation is dead, and that cheap cloud computing would take its place. But it’s clear today that colocation is not going anywhere. In fact, in the face of industry skepticism, analysts across the industry predict continued growth thanks to ongoing digital disruption and the proliferation of business ecosystems, the leveraging of AI/machine learning and the power of the cloud.

To keep pace with the speed of business today, organizations have to continually reinvent themselves and, consequently, their supporting digital infrastructure. The result is that IT directors and CIOs have sprawling environments—which are almost always complex in nature—to manage.

This is where colocation comes into its own. It’s designed to have maximum flexibility with total transparency and solves some of the most frustrating problems faced by IT departments without introducing new problems: it requires the same skills needed to run servers in-house, but the provider takes full responsibility for the physical environment i.e. the state of the network cables, power availability, physical security and even the level of cleanliness are somebody else’s problem.

There are two scenarios where colocation becomes a particularly attractive prospect: firstly, when businesses are looking to simply expand their IT estate, and secondly when a large IT overhaul is being implemented. However, before deciding which colocation facility to choose, businesses must go through a checklist to make sure the multi-tenant data center suits the requirements of the business.

Here are the top five things to consider when choosing a colocation partner: location, security, connectivity, flexibility, total cost of service.


Businesses today expect low-latency and reliability from colocation providers, with zero tolerance for downtime.

Smart providers chose optimal locations combining low cost availability of ample space and power for hyper-efficient data centers with low cost availability of broad and rich connectivity (fiber that today’s digital businesses need). These facilities are far enough from city centers for disaster recovery purposes and avoid expensive city center premiums, but close enough to deliver application performance that local and international businesses demand.


Security is one of the primary reasons that some large organizations have traditionally preferred to build their own data centers. As this is becoming financially unviable, providers must demonstrate that the security of their customers’ IT infrastructure is one of their highest priorities. Both external and internal security are paramount and should be reviewed in three key ways: physical, process and digital.


Businesses use public clouds for access to huge amounts of data and massive compute capability, for on demand computing when needed, or simply for storage. However, organizations still maintain their own private clouds as a way of processing and adding value to their own sensitive data that they collect and to handle complex computations. This is the hybrid world that is becoming the de facto standard.

Connectivity to the right carriers is critical if cloud is to work. It ensures that multiple public clouds can be accessed, which will increase performance. The term for this is “on-ramp to cloud”. Companies should be aware that while some data center providers can build the best high-performance computing platforms, without connectivity provisioning on-ramp to other clouds, businesses won’t be able to adopt a hybrid cloud strategy.

Colocation providers are designed to be connected to carriers. Those data centers that own a fully diverse fiber duct infrastructure to meet all of the fiber owner/operators make every other possible carrier or related supplier just a cross connect away, providing limitless connectivity, cost effectively.


Overly rigid long-term data center contracts are no longer palatable for many global cloud and digital organizations where the fast pace of business and technology can require them to change direction quickly. If enterprises and IT agility are held back by antiquated and inflexible data center platforms or contracts that can’t react quickly in line with business plans, it can lead to missed opportunities and severe IT cost inefficiencies. This is a serious concern for businesses today.

Flexible contract options provide true commercial and technical agility which benefit enterprises. Providing the ability to flex the contracted power, space and time of the service at any point allows businesses to take full advantage of the differing costs per compute as they increase or decrease IT density.

Total Cost of Service:

Today, the data center market has matured and buying colocation space has become the strategy of choice for most businesses. Companies should make sure they aren’t paying more than they need and look for a disruptive commercial model, which gives absolute flexibility from a rack to a suite, for a day to a decade and total transparency and control of usage.

Things to look out for when calculating Total Cost of Service (TCS):

  1. Lower build costs per MW of IT load
  2. Reduced energy costs through low PUEs and ultra-efficient cooling technology
  3. Flexibility to provide high-density cooling capability
  4. In-built monitoring and operating support
  5. Connectivity-rich data centers with ecosystems
  6. Flexible contract terms for both colocation space and connectivity

The future of colocation:

In the immediate future, the Internet of Things (IoT), AI and Machine Learning are having an impact on colocation demands and providers. Products such as smart home and smart car applications are generating huge amounts of data. As IoT-enabled products become more prevalent, machine-to-machine communications using open protocols will see devices consume data in ways that we are only just starting to explore. The volumes of data and speed required for this type of processing can only be housed in buildings designed specifically for this purpose – a data center.

As for the next ten years, colocation providers will need to adapt to emerging technologies such as network functions virtualization, software defined networks and Platform-as-a-Service (PaaS) if they are to continue to support the scale and functionality needed by modern businesses.


About the Author: 

Darren Watkins, Managing Director of VIRTUS Data Centres, began his career as a graduate Military Officer in the RAF before moving into the commercial sector. He brings over 20 years’ experience in telecommunications and managed services gained at BT, MFS WorldCom, Level3 Communications, Attenda and COLT. He joined the VIRTUS team from euNetworks where he was Head of Sales for the UK, leading market changing deals with a number of large financial institutions and media agencies and growing the company’s expertise in low latency trading. Additionally, he sits on the board of one of the industry’s most innovative Mobile Media Advertising companies, Odyssey Mobile Interaction, and is interested in all new developments in this sector. Darren has an honors degree in Electronic and Electrical Engineering from University of Wales, College Swansea.