Skip to main content

Colocation Services – Weighing Up the Benefits

By 28th Apr 2021Feb 23rd, 2022No Comments

The Risk-Benefit Analysis of In-house vs Teraco Colocation Services

Making significant changes to an enterprise network and choosing to use colocation services requires careful consideration of all possible outcomes. Regardless of the benefits gained, change, is always accompanied by some level of risk, leading to a reluctance on the part of the IT department.

In the whitepaper, “It’s not about the rack space”, we outline why we firmly believe colocation at Teraco coupled with open peering at NAPAfrica offers strategic value for South African enterprises. In “What is your data centre costing you?” we expand on the IEEE’s formula for calculating what your data centre is costing you. In this article, we highlight what we see as the key risks and benefits around migrating your in-house data centre compute and storage to a colocation data centre facility like Teraco. Let’s take a look at some of the risks and benefits.

Colocation Risk Analysis 

Any decision that involves a significant change to an enterprise network requires a comprehensive risk analysis. Once you’re happy that the cost comparison makes sense, the following may help in identifying some risks to focus on:

Power outages. Load shedding places an increasing strain on enterprise battery banks and UPSs. Teraco’s colocation services are resilient, concurrently maintainable facilities, running redundant UPS and generator systems that provide continuous power through load shedding incidents and maintenance work.

Control and responsibility – complete control over your in-house facilities can be a double-edged sword and the source of many sleepless nights. The main risk of choosing colocation services with a third party, is ending up with a service provider who does not take better care of the equipment environment than you can. Make sure you pick the right location and the right service provider. Insist on clear SLAs and get references.

Link failure – on last-mile links to your in-house data centre will cut services to all users outside of the campus. Teraco facilities are arguably the most interconnected data centres in Africa.

Link redundancy is relatively easy and cost-effective to provision.

Downtime. Enterprise data centres are seldom ever truly 24/7. Downtime comes with the added risk of ‘travel time’ if no remote hands services are available. Teraco offers SLA guaranteed uptime; 99.999% on power; 99.99% on cooling & environmental controls as well as interconnection.


Facilities management. Enterprise data centre management responsibility often resides with highly specialised systems engineers. These individuals are seldom specialists in air conditioning, cable management, fire suppression, physical security and uninterrupted power management. Teraco employs teams of highly qualified data centre facilities professionals whose sole focus is the provision of continuous, guaranteed service levels.

Migration. Migration strategies always carry double-run costs. Without adequate planning, a migration project delay becomes very costly.

Service migration. Service migration is complex and could result in downtime due to incorrectly identified connecting components.

Lost opportunities. Deploying a presence in Teraco is not enough. Continual updates from Teraco on current and new products and services are needed to ensure your digital transformation strategy can evolve as new technologies and business partners become available.

“In South Africa, you cannot be ‘closer to the Internet’ than at Teraco.”
Jan Hindzo / Lex Van Wyk, Teraco Data Environments

Colocation Benefits

A premium data centre facility. At Teraco, you get a premium colocation environment with SLAs on the environment, power, and security. You no longer carry all the costs, responsibility or risk, for what is usually a non-core support function to your business.

Efficient Internet traffic routing. Instead of all your Internet traffic flowing up and down the link between your data centre and your ISP, up to 70% of your outbound Internet traffic (IP transit) can be offloaded down a short length of fibre to any one of over 300 carriers, service providers or enterprises, at no cost. All you need is an ASN and public IP address range.

Close to the clouds. The further your servers are away from the cloud and content providers, the more the laws of physics force unnecessary latency on your users. Providers of SaaS, PaaS and IaaS cloud and CDNs are less than five milliseconds away from your colocated servers at Teraco.

Close to your mobile workforce and customers. An increasingly mobile workforce places additional stress on connectivity to your data centre, with latency issues arising between mobile networks and your data centre. At Teraco, the networks that carry your mobile users’ traffic are less than five milliseconds away from your WAN.

MTTR and travel time. Always account for travel time to Teraco during downtime. In theory, with a resilient design, you would never be physically down.

Uptime. In South Africa, you cannot be ‘closer to the internet’ than at Teraco, and that in a highly resilient location managed by certified data centre professionals. These factors alleviate uptime issues and latencies that have plagued the enterprise data centre for the last 20 years. An Uptime Institute statistic of the root cause of outages in data centres shows that 88% of all outages are either due to human or mechanical* failure. If you ameliorate sundry requirements of running your application (hardware, location, environmental, non-application skills) and leave it to experienced facilities professionals, you can drastically reduce these failures.


There are always risks associated with change. Doing nothing would negate any risks involved in migrating compute and storage out of your own data centre to a colocation facility, but given how B2C and B2B digital channels are becoming more diverse and complex and the need for enterprises to adapt to these changes, the benefits of Teraco and NAPAfrica far outweigh any downsides.

If you:

• use digital channels to engage with customers, suppliers and business partners;
• have an increasingly mobile, wireless-first staff and customer base;
• experience growing costs on last mile links and Internet traffic;
• need to reduce WAN costs while increasing performance and reliability;
• need to embrace a hybrid cloud strategy;
• need to improve application and services resilience and uptime.

Teraco’s colocation services and the advanced network fabric of NAPAfrica offer significant benefits and reduced risk.

Read more on Considerations For Data Centre Colocation.