Dany Bouchedid is not only the President of the Technology Channel Association, the only not-for-profit association for channel partners, but he is the CEO of COLOTRAQ. Colotraq is a sort of master agency for collocation worldwide, that has direct agreements with over 400 facilities globally. I asked Dany a few questions about colocation, since I think it is an area that some agents (channel partners) are mystified about. However, with worker mobility and the significance of always available data (reasons cloud computing, SAAS and virtualization are buzzing), colocation becomes important to businesses.
Why is colocation on the upswing?
The primary driver for the increasing demand for colocation and managed services is the increase in the amount of infrastructure intensive applications and services and the cost of housing and maintaining that infrastructure. The technical challenges of powering, cooling, securing and connecting today's powerful servers and vast amount of data storage is dear and requires massive capital investment. It is no wonder that companies are driven to preserve capital and seek economies of scale by outsourcing these functions to third-party specialists.
Today's economic environment places even greater premiums on capital preservation and cost reduction, making outsourcing a particularly hot topic. Companies that already have colocation agreements are shopping for better and less expensive options. Those who have historically hosted their own equipment on their premises are now finally understanding how colocating will result in reducing operating costs and eliminating the need for capital expenditures to maintain their own facilities.
What does Colotraq do for agents that agents can't do for themselves (besides having contracts with 400 centers)?
COLOTRAQ offers agents advantages primarily in three areas: breadth and depth of sourcing resources, flexibility in sales support options and the protection of future commissions through the industry's strongest contracts with providers.
If an agent needs competitive quotes ASAP, whether it's for a rack in Europe, a thousand square feet in China or a server in every NFL market in the US, COLOTRAQ can deliver through its network of 400+ providers in over 1,800 markets across 140 countries.
Agents can choose to work with us in 3 different ways on a deal by deal basis. They can work with us either on a pure referral basis (throw the lead over the fence and we do all the work). They can act as a sub-agent where we only work the vendor side of the deal. Finally, with our "assisted sales" program, they can receive full sales cycle support from our colocation/hosting experts, getting all the help they need to close the deal retaining ownership of the customer.
What makes our value proposition even more compelling is that all of our own agreements with our providers contain, what we call, "true evergreen" clauses. As long as the customer relationship continues, nothing can end our commission stream -- not even termination for cause. Moreover, we don't have to be involved in the renewals and add-ons to the initial sale for us to continue to receive commissions. This means that your commission stream from us is as secure as can be.
RAD: You know agents love to hear that word: EVERGREEN!
What's the trigger for a colocation sale?
Choosing a colocation provider is a complex decision involving a number of factors. All other factors being equal, cost will drive the decision. But cost has to take a back seat to adequately addressing the customer's technical requirements.
For many customers, physical location is their paramount requirement. If their IT staff needs to have regular physical access to the equipment, the colocation site must be located conveniently near their IT staff offices. Conversely, a disaster recovery site should be sufficiently isolated from their current processing locations for it to be safe from local natural disasters. Of course, locations that are not prone to natural disasters such as earthquakes, floods or violent storms are generally desirable.
Location can also be a contributing factor when considering connectivity, power and overall cost. For example, data centers in close proximity to financial markets can offer the lowest latency for transactions giving traders an edge over their competitors. Considering power, electricity costs vary greatly from state to state and country to country. And increased security costs may be offset by the lower price per square foot of space in a run-down area. Getting back to the topic of connectivity, a customer's decision may be sensitive to who is on net in the data center and that they have access to their particular bandwidth provider.
Other factors can also be influential when evaluating power requirements. For one of our clients the availability of power redundancy (two or more generators and power fed from two different sub stations) determined their choice of provider. Metered power can be important. If you do not utilize the full 80% (meaning all of your equipment is constantly running at load) you are being charged for the full circuit in all of your racks, 100% of the time. Metered power can provide significant savings for those running high density server environments. Moreover, metering enables performance monitoring which can be essential to becoming more energy efficient.
Finally, no mission critical colocation decision should ever be made without factoring in the financial stability of the service provider. Resellers are struggling to retain customers. Even the large carrier-neutral colocation providers that have thousands of square feet of available space may also be at risk as larger customers move further back in the value chain and contract directly with landlords and building owners.