The Case for Colocation for Midwestern Enterprises

Many enterprises in the Midwest, especially in Illinois, Indiana, and Michigan, operate their own data centers.  During the dot-com boom of the late 1990s and early 2000s application growth was surging and driving a sea change in the business world from offline to online.  At the time business operations like manufacturing, operations, shipping and logistics, etc. were turning toward technological solutions to make things easier and more efficient.  But there was no reason to think we would be where we are today in the 2020s, with technology completely controlling all of those things.  

At the time, your data center was a component of your business, not as engrained in all aspects of your business as it is now.  While companies realized they needed to head in the direction of investing in data center resources, they were limited in what they could do.   Cloud and colocation were not yet proven options.  

So the solution was obvious, you build a data center, either freestanding or latched on to current office or operations facility.   Hundreds of Midwestern enterprises did exactly that.  

Now 20 years later those same enterprises have a data center that has likely reached the end of its useful life and requires millions of dollars in equipment refresh and upgrades.  

For these same organizations the obvious solution in 2000 is quite obviously NOT the solution in 2020, for the following reasons: 

Operations:  

  • Cloud computing, which was a mere glimmer in technologists’ eyes in 2000, has now been widely adopted, with providers of cloud services among the most consistently high-growth companies in the world.   
  • Even if you’re not a “born-in-the-cloud” organization, the cloud is likely where you have turned for so many business operations that once took place within the walls of your data center.    Email, accounting, HR, customer communications, and dozens of other activities are outsourced to SaaS and cloud providers.   

Personnel:  

  • Your talented technologists are of more value to your organization by improving your products and services than they are in operating a data center.
  • Data center professionals are either reaching retirement age or have moved on to more lucrative careers with cloud providers and other companies that utilize their data centers to create revenue, not just keeping the operations of the business moving.  

Finance:  

  • The capital investment in new data center equipment can almost certainly be utilized to earn a higher return by being invested in your core business.  
  • Ownership of a data center facility adds complexity and uncertainty that your organization just doesn’t need.  

These facts clearly make up a situation where upgrading or building your existing data center simply isn’t the solution.  

The Case for Colocation for Midwestern Enterprises

For most organizations, especially companies in traditional industries that were not created to exist in the cloud, full immersion in the cloud is not the answer.   It makes little sense to move applications that are working perfectly well in traditional data center environments and transition them into the public cloud.   As any technologist knows, that’s an expensive, time-consuming process that can cause significant pain and a loss of focus on your customers and core business.  

Your solution is likely something that didn’t meaningfully exist in the early 2000s –  data center colocation. 

Placing your servers and other IT infrastructure within the walls of a facility operated by third-party data center professionals is an industry that developed rapidly in the 2006-2010 timeframe and exploded in the 2010s.   Not only is it now a proven concept, but a thriving real estate asset class has developed around the concept of fractionalizing technology operations as a service.  You have your own secure environment within the data center, accessible only to your employees, contractors, and service providers.  

Indiana Colocation: The New Game in Town

The Chicago data center market is a vibrant one, in spite of the subpar economics provided by high taxes and regulation in Illinois.   You may have looked into data center colocation in Chicago for your organization in the past but had trouble making the financial aspects work.   Fortunately, there’s been an extremely positive development for the enterprise interested in modernizing their data center infrastructure in the Chicago market.  

Business-friendly Indiana has passed legislation to become a serious player in the data center industry, with a “Zero for 50” half century tax holiday for major data centers.   Newly opened in Hammond, Indiana, on the state line just 12 fiber miles from Chicago, Digital Crossroad has passed the threshold for those tax abatements.   Your data center operations are not taxed at over 10%, they are tax free.  

Explore Your New Solution:  

You can see the City of Chicago from Digital Crossroad, but the cost advantages associated with this new data center puts an organization’s data center budget on an entirely different plane.   For more information on the Digital Crossroad advantage, visit digitalcrossroad.com to arrange for a conversation or a tour. 

See Why the Total Cost of Ownership is 50% Lower than Other MarketsWe invite you to measure for yourself using the TCO estimator and find out the total cost of ownership and all the benefits our customers have with us at Digital Crossroad.
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