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I have reached a capacity where managed hosting is becoming expensive - especially with respect to the cost of bandwidth we are using. A cursory quote from cogent demonstrate that we could be saving over 70% on our total transit expenditure.

What are the key factors when deciding on choosing a datacenter to colocate our servers in, and what are the type of costs involved in doing so (necessary hardware purchases, etc)?

Additionally, how do I decide upon IP transit providers. Are there any tariffs available for comparison, or do I really need to call each one just to get a price comparison? What is a realistic price for a 2Gbps connection? What are the caveats of a 95th percentile calculation?

It all feels bit overwhelming, so I could use a prod in the right direction to understand how I go about colocating. Our primary market is the UK and Western Europe.

Any advice would be much appreciated.

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I'll start off by saying Cogent is considered one of the cheap providers. They can get you a great pricing, just like Hurricane Electric can, but you would never want to be single-homed to either of them. You will likely want to put them in a BGP mix alongside a well-known IP Transit provider such as Level(3), AT&T, Telia, etc.

There are datacenters and then there are real datacenters. Depending on your budget, you're either going to go with a cheap one, or with a good one that has at least n+1 redundancy on power and cooling.

When colocating you're in charge of your hardware, so if something breaks you need to have already send replacements with your server, and then you can phone the datacenter and be charged something like 60$/hour so they can replace it, or you can drive over and do it yourself, but chances are you might not be very happy doing this at 2AM in the morning. Typical things that fail are HDDs, PSUs and RAID cards. Some may say RAM tends to fail, but those people simply didn't put in the time to properly test their RAM before putting a server in production.

I can tell you that in the US a 2gbps can be had for around 8000$ per mo., if fully committed and this is with a good BGP mix, but the prices can still be higher.

Colocation can become worthwhile when you're ready to colocate a full rack. The overall pricing versus colocating two 1U servers will be a lot more efficient.

Perhaps colo isn't the right answer, and you're just paying your current host too much.

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