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  1. #1
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    Why is Colo so expensive
    Hey,

    I have been scratching my head trying to figure out why colo is so expensive in Aus compare to other 1st world countries.

    Is it the cost of electricity? insurance? or is the labor costs that went into building the facility that is the main contributor.

    Thanks

  2. #2
    Servers Australia Peter-SAU's Avatar
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    What sort of pricing have you experienced in the US?

  3. #3
    Registered User Ransom IT's Avatar
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    Colocation alone isn't all that much more expensive in Australia; maybe a little due to higher power costs only. It's the data and service associated with it that costs significantly more than everywhere else. If you shop around there are plenty of people willing to sell rackspace alone quite cheaply.

    The US and European markets are far bigger and more competitive and there are more mid range datacentres where in Australia the industry is dominated by the DC providers like Equinix or NextDC who most would categorise as 'premium' datacentres (i.e. purpose built facilities and not a smaller converted building). The middle ground operators are not a big part of the market in Australia really...

  4. #4
    As a provider who colocates in the USA, EU and in Australia we can confirm that Australia is the most expensive
    Bandwidth and power are the biggest chunks in the pricing.
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  5. #5
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    Quote Originally Posted by Peter-SAU View Post
    What sort of pricing have you experienced in the US?
    Just follow the new international links on WHTAU to WHT to the colo offers. It really highlights the difference. Granted they are offers but that also makes another point there is hardly any offers on WHTAU.

  6. #6
    Registered User ausandrew's Avatar
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    It's the power and data, although these are slowly coming down. We are about 10 years behind the US.

  7. #7
    Quote Originally Posted by Ransom IT View Post
    Colocation alone isn't all that much more expensive in Australia; maybe a little due to higher power costs only. It's the data and service associated with it that costs significantly more than everywhere else. If you shop around there are plenty of people willing to sell rackspace alone quite cheaply.

    The US and European markets are far bigger and more competitive and there are more mid range datacentres where in Australia the industry is dominated by the DC providers like Equinix or NextDC who most would categorise as 'premium' datacentres (i.e. purpose built facilities and not a smaller converted building). The middle ground operators are not a big part of the market in Australia really...
    Most CoLo providers, like Servers Australia, as an example, just rent racks out of those larger DataCentres and onsell them, the likes of Micron21, while more expensive give you premium bandwidth and free support as a part of the overall package.
    But they also have agreements with those larger Datacentres as well, for things like high availability services etc.
    It all comes down to your business model, aka, what you want to provide to your end customers. The likes of Servers Australia tend to aim themselves at a more budget end of the market, where as Micron21 tend to go for the more premium end for businesses that need more hands on support.
    So you need to pick providers that meet your individual needs, and not just go on price alone.
    Some of those cheaper providers will have more expensive options, it all comes down to individual requirements in the end.
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  8. #8
    Registered User Ransom IT's Avatar
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    The problem is till you've tried a service you can't really compare in a useful way.

    If some provider has a colocation and transit product with significant outages every few months, a congested network with average throughput less than half of the speed of other providers who charges more but have no or little downtime and consistently high network performance then it actually makes the budget provider look expensive.

    Premium is just a marketing word people use that these days in this industry has little useful meaning. Anyone can brand their product this way if they wish and usually get away with it.

    If you aren't located in the same place and need to rely on remote hands services this really needs to be taken into consideration as well. $80+ per 15 minutes for remote hands work quickly adds up.

  9. #9
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    Quote Originally Posted by Chaddy View Post
    Most CoLo providers, like Servers Australia, as an example, just rent racks out of those larger DataCentres and onsell them
    So most colo providers are just the guys in the middle. I guess there is not a lot of competition at the wholesale level to reduce the rent.

  10. #10
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    When I see the prices on the other WHT site, its just wow. $30usd per month for colo is realistic (no comment on what the service is like) but when I look in Australia, there is nothing close to this. $150 - $500 per month seems to be the norm.

    When seeing so much of the US pricing, its really hard to tell if the Australian deals is worthwhile, everyone claims to be the best, but at the same time, what we need is something affordable.
    There just doesnt seem to be that many offers being posted around here either.

    I understand and respect that alot of the high pricing comes down to bandwidth and even ddos protection, but part of me would like to know what it costs to actually get a slice in a datacenter, where you can install racks, and everything else needed. Knowing the base cost, (and what that adds onto each RU spacing) would actually help me feel at ease with the pricing we see for colocation.
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  11. #11
    Registered User Melbourne-DC's Avatar
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    brainstorm
    When 45 RU Full racks costs about $1300 per month in Australia price per RU will remain high.

    MelbDC

  12. #12
    Registered User CloudIO's Avatar
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    There is a much higher demand in the US than Australia and also a lot more competition. Competition does drive the price down and then you have to factor in the cost for power and staff here in Australia.

    There are providers who can offer you as low as $85 per RU but they are not known for offering as one of the best services.

    The norm is around $100-150 per RU depending on who you go with.
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  13. #13
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    Along with the many things listed above, you also have to consider:

    Cost of living, Wage's, Cost of Land etc. This all rolls down the line and eventually, the cost makes its way through Colo providers which drives up the cost of physical space in data centres.

  14. #14
    Colocation is very expensive, especially in Melbourne.

    I guess we are just a tad behind the US, UK and EU, but Australian servers are triple the price of ones hosted in the US!

  15. #15
    Australian Cloud Albator's Avatar
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    The post my comment referred to has been removed so I have removed mine
    Last edited by Albator; 08-08-2015 at 02:23 PM.
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