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Data center colocation services vector illustration of server rack equipment

Choosing colocation services for your business means that you’re leasing data center space, power, and cooling from a provider that owns and manages a data center facility for you. The popularity of colocation has grown alongside Cloud services, offering major benefits when compared with on-premises solutions.

In this blog, we focus on colocation’s financial benefits, covering five key ways it boosts your bottom line.

5 Financial Benefits of Colocation Services

1. Cut High Capital Expenditure

Building and implementing your own data center facility comes with a massive price tag up front, including having to create the proper environment and redundancies to store your servers. Colocation allows you to reduce capital expenditure because you only have to invest in hardware and software, not the storage environment itself.

This means you can enjoy a spacious, high-quality colocation data center at a price you can afford not only now, but also as your business grows and changes in the future. Colocation’s capital expenditure savings are ideal for businesses that don’t want the permanent investment of an on-site data center or can’t currently afford to build one that will meet their needs well.

2. Lower Operating Costs

On top of an already costly initial investment in having your own data center on-premises, you’ll also pay enormous amounts to keep your data center environment running smoothly and up-to-date. No matter how much space and energy you actually need at a given time, you may often find yourself paying more than necessary to cover management and maintenance.

With colocation services, you can reduce unnecessary operating costs because you only pay for what you need when you need it. This efficiency means you can expect a consistent, predictable cost without significant miscellaneous expenses.

Additionally, your provider’s team of experts are handling the huge colocation data center environment for you, meaning you don’t need to invest as much in personnel as you would if you owned the data center. This includes maintaining the space, power, bandwidth, IP address, and cooling systems necessary. Colocation hosting gives you greater bandwidth with a lower cost so you can enjoy the features of a large IT shop without the massive price tag.

Businessmen on tablet touch screen reviewing a diagram or chart of financial reports

3. Reduce Risk

Did you know that colocation is more secure than hosting your own server? Colocation offers a higher level of security and maximizes your uptime thanks to the following features when you choose a provider like LightBound:

  • Powerful generators and backup power to keep your servers safe during an outage
  • Servers stored in ideal temperatures with redundant power, cooling, and fire suppression
  • 24/7/365 monitoring and assistance
  • Advanced physical security including biometric access, cameras, individual cage locks, and substantial access logs
  • Compliance with ever-evolving industry regulations

When your infrastructure is protected and monitored by a trusted data center services provider’s environment, you can rest easy knowing your business operations will run smoothly and get quickly back on track when something goes wrong.  

By avoiding the costs of downtime and remediation, your bottom line will thank you. Plus, you don’t have to pay to keep up with expensive security technology, monitoring, and certifications.

4. Improve Customer Loyalty

Housing your infrastructure with the right colocation provider means your customers can trust that you are keeping their data safe. Reduced downtime and smoother business operations will mean less frustration for your customers and increased brand loyalty. When your business runs well, it fosters happy customers that have faith in your business.

5. Scale Easily

When you store your server equipment in your own server racks, there’s no easy or cost-effective way to move, grow, or shrink the space you store your infrastructure. With colocation services, you own your server hardware and can upgrade anytime rather than being stuck with the initial facility plan in your own data center. Rather than having to completely rebuild your own data center, your provider will provide you space to easily scale your infrastructure up or down on-demand.

Plus, if your office building moves locations, you won’t have to worry about transporting your infrastructure with it—it can stay put at your colocation site. This flexibility and scalability can be a wise investment in your bottom line, especially if your company is fast-changing, a startup, or requires a fast time to market.

Landscape view of very large data center data storage array for colocation services

Choosing the Right Colocation Provider

As much as 4-5 times less expensive than insourcing, colocation offers many benefits to your bottom line. If you think colocation is right for your business, then it’s time to get serious about choosing the right colocation provider.

This is a crucial step to ensure colocation success because no two providers are the same when it comes to the value of their offerings and service delivery. Look for a provider like LightBound who will be a partner to your business, providing continued personal attention,  24/7/365 support, top-notch security, and custom solutions.

Want to learn more about colocation services? We’d love to hear from you! Contact LightBound today and our experts will help answer all your questions and share how colocation hosting can benefit your business.

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