6 Factors Enterprises Should Look for in a Colocation Provider

Robert Rockwood, President, Sabey Data Centers

When selecting the right colocation provider, enterprises need to consider many factors. Here are six of the most important considerations to ensure you make the best choice:

1. Is the provider’s senior team focused on you? Make sure the leadership of the provider you select knows who you are and what you plan to accomplish. If you have not met the provider’s President, Chief Revenue Officer, CFO, or Chief Technical Officer during the sales process, will you once you have moved in? Not likely. Has the senior team taken advantage of meetings, calls and tours to get to know you and what you care most about? Expect the provider you select to make service to you the priority at every level, not just site level.
2. Doing the Right Thing: Find a provider with an on-site team – supported by senior management – willing to work hard to maximize the efficiency and reliability of your deployment. You want a provider focused on your operation not cowering behind the demark described in the lease.
3. Executive Stability: When considering a colocation partner, executive stability should be top of mind. Stability equals accountability. Frequent changes in leadership mean a search at the board level for an increase in rate of growth of revenue and income. Leadership brought in to accelerate earnings must bump you and your deployment down the priority list. On the other hand, you do want an economically healthy provider and there is nothing wrong with growth when it comes from execution of a long term strategy. See next criteria.
4. Consistency in Strategy: You want the provider you choose to champion a strategy proven to win market share and loyalty. You want a provider who serves data center customers first knowing that income will follow that good service. Look for data center campuses that have expanded over time and still have room to grow. Look for efficiency (low total cost of operation relative to other data centers in the same market and data centers in other serving regions), sustainability to meet your Net Zero targets, access to connectivity and to your end users, and of course absolute reliability. And look for low churn. Go where customers stay. These are all great questions – strategy, sustainability, churn – to ask the senior managers. The senior managers making sure they participate in your selection experience.
5. Expansion Opportunities: Remember that great campuses are built at the intersection low cost, renewable power; connectivity; supportive public policy; talent and physical convenience. Finding those locations takes real estate development skill as well as data center construction and operation skill. Find a provider that owns, develops, operates, and holds onto its campuses. If they have brought great campuses to market several times already and leadership has remained stable, they will do it again for you when you are ready to expand. A provider like that is an ideal candidate for scalability and growth for enterprises.
6. Financial Transparency and Strength: An A+ rating from a third-party agency, low leverage, decades of profitable operation, and low churn. Those are the hallmarks of financial strength. All those metrics are accessible either as public record for public companies or upon request from private companies. Make sure you understand what they say about the provider you select. Your own assessment of two more important indicators of financial strength should become apparent during tours and discussions: well-maintained assets and a work force that communicates optimism.

Finally, the provider you choose should enjoy answering your questions about those six factors. Answering those questions, demonstrating just how great the campus serves its customers, and then serving those customers is what we do and it’s why we’re here.

Robert Rockwood is the President of Sabey Data Centers. Sabey Data Centers has over three million square feet of mission-critical space and is one of the largest privately-owned colocation data center providers in the world.