Town or country?


31 January 2017

Let your marketplace decide on data centre location

Location can make or break any business. Proximity is everything and success hinges on having close ties with the right customers, partners and networks in all the right places. We see this clearly with retail stores; an accessible spot on a rural high street or buzzing city shopping district provides a valuable competitive edge and the same rules of location apply to IT. 

Having digital capabilities is no longer simply a part of running a business – in many cases, it has become the business itself. Even the smallest of firms can now operate on a global scale through technology. At the heart of digital business and every effective IT strategy is the data centre, and where it’s located is vital for success.

If critical infrastructure for any business is situated away from its core market, it becomes inconvenient, hampers performance and adds cost. For many businesses when it comes to IT’s role in supporting the business, location is all about the town; they need the scale from cities that builds critical mass. For other businesses, countrywide might better support reach if the business case can be supported.

The streets of London

Although perhaps not paved with gold, as Dick Whittington had hoped, the streets of London do offer a unique opportunity. The square mile is a centre for global finance while nearby Tech City is the third largest technology start-up cluster in the world. London is undoubtedly a global hub for economic growth and technical innovation – so being located at its centre makes it easier to access consumers, corporations and infrastructure.  

Proximity can have a big impact on performance. Faced with an abundance of choice end-users are becoming more demanding. They want better, faster services and more frequent communications which in turn, means businesses need an infrastructure that can deliver. Firms with a physical footprint in central London can plug into some of the best technology infrastructure around.

The capital also boasts some 7.5 million broadband subscribers while central London is home to around 16,000 SMEs. These are valuable markets for a range of firms, including B2B service providers and content distributors. Being close to the action will minimise latency to these vast markets – and performance really does count. For Amazon, every extra 100ms of latency costs it 1% of sales, while Google found that adding just half a second to page load times reduced traffic and revenue from searches by a fifth.

It also comes down to convenience. Travelling out to regional data centres in order to install, upgrade or repair systems is time-consuming. Having your infrastructure close at hand, near to central London offices is far easier to access and maintain. And time really is money – if a business’s IT fails, the hours it takes for staff to reach their own kit when it’s sitting at a hard to reach location quickly adds up to costly downtime. Estimates on the exact cost of this vary. One study found that just one hour of downtime can cost a business $1m (£800,000) or more while a survey of mid- to large-sized US enterprises found that companies lose on average some $140,000 (£110,000) per incident.

An affordable pad in central London?

The challenge, of course, is that central London real estate comes at a premium, but often silent IT costs are ignored when finance take a look at the quote. A business housing its own data centre in the middle of the action for instance will need significant budget, but not only for infrastructure and BAU. Taking up precious – and expensive – office space can often be overlooked as the costs are capitalised. Moving out of town might well then seem cheaper, but the benefits quickly fall away.

It’s time now for businesses to think more strategically about IT and move their data centres out of their offices or back into the city. By taking advantage of London’s carrier and cloud neutral colocation facilities, businesses can minimise overheads and improve performance and reliability. Data is the lifeblood of many businesses and they can’t afford even a fleeting moment of downtime. Colocation provides state-of-the-art security and the highest of redundancy but without the costs associated with proprietary facilities.

Demand for these services has resulted in London becoming a hotspot for colocation. But with many on offer, businesses that opt for a provider in central London with the right interconnection options stand to gain the most. They’ll not only have access to all the technology innovations but also be in the midst of the thriving business community and – crucially – their end users.

Find out more about the benefits of colocation in the centre of the capital in our free whitepaper.