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Network-neutral data centres benefit businesses

Network-neutral data centres benefit businesses 

Choosing a network-neutral data centre has its benefits, such as competitive pricing. Graham Williams, chief commercial officer, Cologix, explained why more Canadian customers should consider network-neutral data centres.

Williams enumerated the pros of choosing a network-neutral data centre. “They encourage competitive pricing and innovation, eliminate switching costs for networks services, and give companies of all sizes much more buying power and access to higher-quality services,” he remarked. “Choosing from a broad menu of provider options also increases network redundancy, helps future-proof IT infrastructure decisions, and allows buyers to select best-in-breed services from multiple providers.”

Cologix’s chief commercial officer asserted that network neutral data centres help maintain an open and competitive market place. “Consider the analogy of how network-neutral colocation providers are like large farmers markets,” he said. “In both, buyers and sellers meet in one open marketplace, where buyers freely select only those goods and services from a broad set of vendors that are competing for their business. To attract customers, vendors price their goods and services competitively, and they work diligently to provide the quality and selection their customers want. Network-owned data centers don’t have these market pressures. Shoppers are therefore stuck with that vendor’s price, quality and selection.”

“Network-neutral colocation centers give companies broad choice through direct access to many network service providers,” Williams added. “Some neutral providers have more than 300 network service providers available via their Meet-Me-Rooms. When all of these providers compete for business in a neutral marketplace, customers of all sizes – from start-ups to global enterprises – have leverage to negotiate and can achieve significantly greater buying power. In fact, network-neutral data centers help many companies gain more than 20 percent savings on their overall network expense.”

Options for this type of data centre are limited in Canada, though. “The Canadian colocation landscape has changed dramatically in the past 18 months, which has reduced customer access to network-neutral options,” Williams commented. “In this short time frame, network providers have acquired six network-neutral data center providers, limiting the number of platform-level, network-neutral colocation providers in Canada.”

Williams explained why this development is bad news for Canadian businesses. “In carrier-owned data centers, network providers know their customers are unlikely to suffer the headache, expense and downtime associated with moving their equipment,” he noted. “The costs to switch network service providers are high. Knowing their customers will avoid these stiff switching costs, network providers can raise their prices with impunity. Beyond the impact on pricing, the lack of competition also allows them to maintain their service-level status quo. Why innovate and improve quality when you can raise prices without doing so?”

The Cologix executive pointed out that choosing a non-network-neutral data centre now might not serve companies so well in the future. “Change is inevitable in business, especially when optimizing IT infrastructure,” Williams said. “Today’s IT landscape looks a lot different than it will a few years from now. It’s cost-prohibitive for customers co-locating in a carrier-owned facility to switch providers. Consequently, the networking decisions they make today are nearly impossible to undo, and they will have a business impact far into the future. In addition, no single provider is ideal for all services. By co-locating in a data center without choice, buyers can’t unbundle and select only those services that best match their needs.”

However, the situation is not entirely bleak. There are still two network-neutral data centre providers in Canada: Cologix and Equinix. Equinix has a data centre located in Toronto, and Cologix has facilities in Vancouver, Toronto and Quebec. Choosing network-neutral data centres will send the message to carriers that customers demand the freedom this type of facility provides to them.

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