Companies Struggle With Aftermath of Provider Interruptions
Co-Location Facilities Provide Internet, Data Protection
BY MIKE VIGNATO
Special to the Business Journal
The co-location industry motto is “always on, always online.” In today’s business world, a lapse in Internet connectivity spells financial disaster , lost sales and upset customers, not to mention a wavering corporate reputation.
Just ask a company whose representatives have had to field calls from customers, wondering why the company’s Internet site was inaccessible for a week. Or talk to the sales manager who needed but couldn’t access specific data for a contract, only to lose the business deal to a competitor. Co-location facilities provide answers to these problems by providing round-the-clock Internet connection and data protection.
In simple terms, co-location means housing Internet Web servers and critical data offsite, but today’s “co-los,” as they are called, do a whole lot more. Many provide network redundancy , which means an assured connection to the Internet-utilizing multiple providers and offering customers enough bandwidth to protect them from online interruptions.
Basically, co-location can assure that servers remain up and running even when a provider is down. Other features could include a firewall, a filter for incoming data and a secondary generator to address possible power shortages.
Co-location is no longer the stepchild of large corporations who want to augment their existing Internet protocol operations off-site, but instead it is an integral part of the corporation. In fact, today’s co-location facilities demand that company managers throw out all their existing metrics about size of processing power or corporate growth rate. Regardless of industry type and size, managers have to answer one question, “In your current business operations, can you be without Internet connectivity or certain data for a week?”
– How the Industry Got Into Trouble
Historically, the co-location industry rode alongside the dot-com heyday and many companies died as a result of dot-bomb fiascos. Their problems included flawed business models, with massive overhead, multiple facilities marooned without the dot-comers and a large, looming debt burden.
In the late ’90s, their failure was the result of what could be called co-location’s “Andy Hardy School of Business.” Co-lo entrepreneurs put on a show, went to the IPO stage, sold, and used the cash windfall to buy up market share and open multiple co-location facilities.
Unfortunately, they also had to take on high price leases and equipment requirements , part of their downfall. In addition, they tried to become all things to all people.
For example, they tried to be a co-location facility and a managed services company; or a co-location facility and a service equipment provider, or caching facility. The result , a “multiple personality” corporate objective, which, coupled with a poor business model that relied too heavily on the dot-com industry, brought companies such as Exodus into Chapter 11.
It’s really no surprise to see the correlated growth rates of Internet and broadband usage and the projections for increases in co-location facilities. All that data has to go somewhere and all that traffic needs a smooth channel for delivery.
– Internet Growth, High Security, Power Outages
From a global perspective, Internet usage will grow from 135 million in 1998 to 475 million in 2002, and growth of Internet traffic will hit 1000 percent annually during the next five years. Businesses alone will increase their broadband usage from 400,000 businesses at the end of 1999 to 4.5 million in 2002.
By comparison, the co-location facilities market will approach $8 billion next year, up from $1 billion in 1999. And while currently, only 20 percent of the Fortune 500 companies outsource their co-location data networking requirements, next-generation communications capabilities will soon make co-location a necessity for just about any company worrying about secure data storage and Internet connectivity.
Following the Sept. 11 terrorist attacks, there is growing concern about security and that concern goes deep into our personal and business lives. In the world of co-location, security has reached a new pinnacle and has multiple definitions.
There is security associated with access to data. In co-location facilities, offerings can include biometric fingerprint scanners, multiple video cameras for remote viewing of storage cabinets, and continuous, 24/7, technical on-site support. Security also translates into the provision of a continuous power supply, often in the form of an on-site generator , protecting vital corporate data and servers from power surges, outages or blackouts.
Data also must be protected from threats such as viruses. Firewalls offered by most co-location facilities create a checkpoint for incoming data , preventing viruses such as the recent “goner” virus and directing data to appropriate Web or mail sites.
Redundancy is the name of the game and, to most in the field, the most important concept associated with co-location services. What this means is that if one system goes down, there is always a backup.
Some co-location facilities provide multiple upstream providers or multiple paths to the Internet and can provide two autonomous network connections and two sets of fault tolerant routers.
– Accessing Mission Critical Data Anytime
It’s just common sense that customers will move into the co-location outsourcing model as their data networking demands increase over time. The co-location facility industry is now making a comeback after the dot-bomb scenarios.
This is due, in part, from the explosion of e-commerce, the hyper-growth of application service providers, and the exponential growth in Internet usage. Companies don’t want to incur additional switching costs , and usually want to settle into one full-service facility to avoid downtime.
In the future, companies should keep in mind that co-location, by its very nature, offers economies of scale , providing shared meeting points for high value infrastructure elements.
Co-location is still not a concept known by the masses, but it will become the buzzword in the next decade and beyond. Because, in the end, companies can only survive if they provide seamless business operations and preserve their critical data , and that is what co-location is all about.
Vignato is the CEO of Castle Access, a San Diego area co-location facility.
