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How to calculate the price charged for Colocation, Dedicated and IaaS

Providers use different approaches when  determining pricing rates for their services. While some include hidden fees into their prices, others provide transparent and convenient pricing, thanks to which the client clearly understands what services are covered and how much he will pay today, in a month and in a year. Below you will find out how pricing works for three popular services in the data center: Colocation, Dedicated and IaaS.

Colocation: how to calculate the price for placing equipment

Basic package for Colocation service usually depends on the characteristics of the equipment placed. For example, for Colobridge clients, this is the sum charged at peak power consumption by each server or network equipment component. In a server, processors, drives, and memory modules consume power the most. Accordingly, if one knows the total rated power, one can calculate how much it will actually cost to place the equipment. However, since the equipment is never working at 100% capacity, Colobridge uses an averaging factor when making calculations. This is an understandable and fair pricing since it is the  electricity price that is a significant expenditure item for any data center.

It is possible to determine the price of placing equipment based on the actual amount of electricity consumed. In this case, the cost will vary depending on various factors affecting server workload (high season, pre-holiday sales, etc.). If this approach is used, monthly payments will vary, making budgeting difficult for a CIO.

Unfortunately, some providers still do not provide transparent pricing – for example, they give a big discount, but at the same time they include hidden fees in the price of the service of which the client is not aware at first. Such hidden fees can be charged for a cooling system, electricity, traffic, or units used in a rack. For example, there are data centers in which two one-unit servers cost more than one two-unit server with the same capacity; this is because prices for main and additional units are different. Thus, the provider encourages customers to install multi-unit servers instead of single-unit ones.

How to choose a conscientious Colocation service provider? We have identified several main features a conscientious Colocation service provider has in terms of pricing.

  • Simple and understandable pricing: the client understands what the monthly payment depends on.
  • It is possible to predict the costs of IT infrastructure in short and medium term. If scaling is expected, the client will be able to estimate in advance to what extent the monthly payment will increase.
  • With the same equipment capacity, the higher placing price is charged by the provider that allocates computer rooms in a certified data center. This is natural and justified from the viewpoint of reliability and safety.

In Colocation, the price of a service increases linearly to the degree the total peak power of the equipment components increases. Moreover, the provider can give a discount when the IT infrastructure reaches a certain size.

Dedicated: how to calculate the price for renting dedicated equipment

As in Colocation, the price for this service depends on server capacities and other IT infrastructure components, but another important factor comes into play – the price for purchasing equipment. Typically, certified data centers use Enterprise-segment technology, which includes equipment from vendors such as HPE, Dell, Supermicro, Lenovo, and Cisco.

The price for Dedicated varies from a provider to provider for several reasons. Firstly, a lot depends on data center quality – in the most reliable ones, it is confirmed by several international certificates. Secondly,  electricity price depends on the country in which the data center is located, and this is the most important expenditure item in any data center. Whether a data center has a replacement stock also has a significant impact on how seamless business services are, and thanks to replacement stock, one can quickly replace failed components. At Colobridge, the required quantity of components is by default stored in its own warehouse. If a standard component fails and  the replacement stock covers it, such a failed component is replaced to a working one, and then it is used permanently. If at that time the failed component was covered by the vendor’s warranty, it is exchanged for a new one, which then becomes a replacement stock. 

In Dedicated, the price varies depending on the equipment rented and the level of service provided. The monthly payment gets higher if the client delegates more tasks to the provider: for example, addressing the issue of obsolete equipment, quickly replacing a defective component from a replacement stock, etc. 

IaaS: how to calculate the price for renting dedicated resources in the cloud

Infrastructure as a service is considered to be the simplest product in terms of creating value. In IaaS, the client receives a pool of virtual resources, and it is their configuration that determines the final price. The first thing that has an impact on pricing is the number of virtual cores (vCPU), the amount of virtual memory (vRAM) and virtual disk space (vSSD/vHDD). However, the price will increase if you need to have other services. Often, customers use related cloud products to improve performance: for example, additional dedicated IPs, data backup and recovery tools, etc. The price for placing data in a public cloud is increased because of the price for software licensing, special support features (more than the basic package covers), administration services, and others. There can also be hidden fees in IaaS: fees for traffic, support, the number of requests for disk subsystems.

In IaaS, the pricing is flexible depending on the needs a business has at a specific point in time. In IaaS, it is easy to quickly get extra resources in the high season or if the workload has increased sharply, as well as reduce the amount of resources at a time with no intense activity.

You can place equipment in a German data center, rent a dedicated server or virtual resources in the cloud on Colobridge technology platform. You can get more products in addition to the listed ones to enhance the features and disaster tolerance of your IT infrastructure. Contact our managers to get a price estimation and make sure that a transparent and honest approach to pricing as to the service selected is used.

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