Contributed by Michael Ray, Solutions Architect at VAZATA
There are multiple business models offering pure colocation services and those models typically rely on how the colocation provider pays for the space and power it has to sell. There are several ways to gain profit margin selling technical real estate and power. The most commonly occurring model consists of a service provider charging for floor space by the square foot. Even in a situation where only a single cabinet or rack is being purchased on a monthly basis, the data center provider has assigned an amount of space to support the physical cabinet and the space around it to cool the equipment that will occupy that space.
A typical amount of space for a cabinet in a standard density facility might be 25 square feet. Divide the price per month for the cabinet by 25 and you will come away with the dollar value number that the data center owner assigns to a square foot of floor space. I should say that these models can differ depending on the facility and the business model of the colocation provider.
There are also different ways to price power in a data center model. Typically, a data center owner receives utility electric pricing from a utility provider as you would at your home. The utility provides a per kilowatt hour (kWh) price based on total usage. In rare cases, the data center provider will pass along a marked up per kWh rate to its customers based on utilization. In a large majority of cases, providers deliver physical circuit types (20a120v) and charge a monthly fee per circuit regardless of the usage on the circuit. Colocation customers are charged for potential usage rather than actual usage. A customer will almost certainly receive pricing in this format for individual cabinet or small cage deployments.
While not always the case, customers can expect a monthly recurring charge for the space, the requested circuit type or bundled pricing for the two components. Rates can vary widely based on region, type and quality of the datacenter offering.