Someone have a spare room? Co-locationBypassing ISPS -- Co-location could solve bandwidth, security woes
December 1, 1998
COMPUTER RESELLER NEWS: Waltham, Mass.
For VARs whose customers want heavy-duty,
guaranteed performance of their Web
application and vaulted security, an emerging
service called co-location could be the
answer.
Co-location is not for customers that need
help integrating their applications, nor is it
for small users who want to host a simple
Web site on a shared server. Rather,
co-location places a customer's Web servers
at a network access point (NAP), or peering
point, where data can quickly hop on the
Internet backbone without navigating
through regional ISP networks.
The servers also can be placed in a
fortress-like atmosphere that can help ease
the worries of even the most paranoid
customer.
VARs said co-location services are gaining
popularity because few enterprise customers
want the hassle of baby-sitting their own
servers, building a secure facility and
maintaining multiple connections to the
Internet backbone.
"Our customers like it because they don't
have to hire the extra staff, " said Gordon
Schultz, president of ComSource Global
Network, a Concord, Mass.-based reseller.
"With data growing at about 70 percent a
year, most places know they need a Web
presence, but they don't have the expertise
[to manage it themselves]."
Analysts predict spectacular growth for
co-location services, particularly as
enterprise resource planning (ERP) and
electronic-commerce applications come
online and customers become more
concerned about adequate bandwidth. This
trend coincides with the efforts of carriers to
differentiate their services and boost their
customers' network performance.
"Of course, one way to deal with [concerns
about lack of bandwidth] is to co-locate at a
major peering point so you are right on the
backbone," said Neville O'Reilly, a
telecommunications analyst at Telechoice
Inc., a Tulsa, Okla., consulting firm.
As a general category, Web hosting is
enjoying rapid growth. Revenue from Web
hosting is expected to quadruple to about $1
billion between 1997 and 1998 and to top
$10 billion in 2002, according to Forrester
Research, a Cambridge, Mass.-based
research firm.
Forrester does not break out revenue
projections for co-location separately from
those of other forms of hosting.
But Forrester analyst David Cooperstein said
co-location is considered to be closer to
complex hosting because the servers house
major applications, even though co-location
does not involve the management of those
applications.
The profile of a typical co-location customer
is either a company that does business only
on the Internet, such as Lycos Inc., Hotmail
or Geocities, or a large corporation.
"These customers would have to make the
decision to either build their own data
centers or outsource, and it makes more
sense to outsource," said Ellen Hancock,
chief executive at Exodus Communications
Inc., Santa Clara, Calif. Exodus has made a
specialty of hosting data centers and in 1999
plans to focus on marketing efforts to
attract companies interested in outsourcing,
she said.
Reddy Marri, president of Reccom, an Irvine,
Calif.-based reseller, cited a customer whose
business was training teachers on the
Internet and needed a T3 line quickly from
the local regional Bell operating company.
The RBOC did not have fiber to the
customer's location, so rather than wait six
months for the 45-Megabit-per-second
service, the customer shipped the server to
a PSINet Inc. co-location site, Marri said.
Many ISPs, such as PSINet, Herndon, Va., or
GTE Internetworking, Cambridge, Mass., and
companies that specialize in secure-building
server "safe houses," such as Frontier Corp.'s
Global Center division, Sunnyvale, Calif., and
Exodus, sell co-location services through
channel programs. Exodus is not an ISP, but
it has numerous peering arrangements with
other ISPs.
Security is a major consideration for many
co-location customers. Exodus data centers
are Fort Knox-like facilities with multiple
Internet connections, pin codes and
scanners, security checks to the building and
around-the-clock support. Hancock said
Exodus also has plans for disaster-recovery
options.
At PSINet, where 40 percent to 50 percent
of its co-location sales are attributed to its
VARs, there are now seven facilities that
house customers' servers. PSINet expects to
build six more centers by the end of 1999.
And Level 3 Communications Inc., Omaha,
Neb., expects to have 26 centers by
mid-1999, up from 10 centers currently, said
Stephanie Copeland, Level 3's director of
data services.
Level 3, which just started selling service on
its new international IP network in
September, has opened co-location facilities
across the United States. Among them is a
Texas-size center in Dallas measuring 89,000
square feet-40,000 feet of which is pure
co-location space. Level 3's facilities are now
20,000 square feet.
---
Fast Facts:
-Large, mission-critical sites are most often
co-located.
-Co-locators offer 24 x 7 monitoring, secure
premises.
-VARs can resell service from several
vendors.
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