3 ways colocation can reduce cloud connectivity costs

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Colocation services got their start with connectivity. The rise of colocation went hand-in-hand with the automated trading movement, as the ability to improve connection speeds by even microseconds gave businesses an edge, leading to an arms race of sorts to access the best data centers with the fastest connection opportunities. Over time, however, the network has become more and more important to organizations in diverse sectors, and that foundational expertise in the colocation industry has spread to benefit organizations facing growing connectivity challenges.

As data center services have evolved, colocation providers have developed interconnections and technological capabilities that allow them to avoid sending data over the internet whenever possible and instead provide more direct network links between major data centers. With many cloud providers housing their servers within colocation facilities, the connectivity fit becomes natural. Businesses that want to interact with the cloud without moving all of their systems into cloud configurations can house many components of their data center in a colocation facility. This lets them take advantage of provider connections to use that facility as a hub for data moving into and out of the cloud.

This more natural connectivity between colocation facilities and the cloud can lead to major performance benefits that pay off for businesses over time. However, it can also reduce costs. Three of the most prominent ways in which that is accomplished include:

"Connectivity between colocation facilities and the cloud can lead to major performance benefits."

1. Reduced internet bandwidth costs
The internet is one of the more expensive connection types a business will leverage. The logic here is fairly straightforward – the cost of building large-scale network links around the world is extremely expensive for telecoms, so they must recoup this cost through customer subscription plans. This wasn't a problem when businesses were doing most of their data-heavy work between their data centers and their LANs.

As organizations move to the cloud, however, data-rich apps and services are increasingly delivered through the internet, something few networks were really built to handle. Because of this, businesses must transition to extremely high-cost internet service plans. By using colocation to move the data back into a controlled connection separate from the internet, companies can reduce the amount of bandwidth moving through their internet services and instead leverage lower cost options for data-heavy workloads.

2. Risk avoidance
Data and regulatory breaches create costs that can severely impact a company's bottom line, not to mention its reputation and long-term health. Because of its very nature as an open network, the internet is one of the least secure methods out there for data transit. Conversely, direct cloud connectivity maintains a closed-off network for information moving between the business and the cloud provider, offering a level of control and security that cannot be matched on the web.

Many modern cybersecurity challenges center around protecting cloud data that ends up on the internet, and keeping data moving through controlled networks eliminates many of those problems.

"Colocation services incorporate usage-based pricing into cloud connectivity models."

3. Usage-based price models
Imagine your business is subscribing to a 1 Gbps internet service at its various office locations. At any given time, your users may only be consuming a portion of that bandwidth, but you are paying for the full capacity constantly. As such, you end up taking on high costs in order to prepare for heavy use periods in order to prevent business disruption, but lose out on value over time as you spend more than necessary on network capacity.

Colocation services incorporate usage-based pricing into cloud connectivity models. To do this, they track your bandwidth consumption over the dedicated links between cloud configurations, deliver bandwidth on demand and only charge for what is actually used. This ensures that your spending for connectivity aligns as closely as possible to the actual value you are gleaning from the technological service, making it invaluable in a wide range of settings.

The internet isn't dead, but you don't have to depend on it
All of this talk about cloud connectivity isn't to say that the internet isn't valuable. Offering simple, open connections for apps and services that do not handle too much data, don't require robust security or aren't critical to the business can simplify some aspects of cloud and IT management for a business.

Cloud connectivity comes into play as organizations become more dependent on the cloud for mission-critical apps and services that demand quality performance and security at all times. By segregating these cloud connections into closed-off networks, organizations are able to unleash the cloud's full potential while also keeping costs under control.