While many companies remain hunkered down and wringing their hands while they wait for the economy to improve, colo provider Telx is on a building boom at their premier data center in Chicago. What kind of sense does that make in recessionary America?
It makes lots of sense if you’re clued-in to what is transforming business and finance. It’s been a long time since accountants wore green eye shades and engineers worked slide rules. Most companies have adopted computer-based workstations connected to servers in the back room. This client-server architecture had a lot to do with increasing the speed of doing business and improving employee productivity in the last few decades. But now some of the savviest companies are adopting new methods and systems to give themselves an edge over their competitors.
Remember when the original justification for computerizing processes was elimination of paper? The “paperless office” became a joke as cheap laser printers and copiers spit out reams of paper faster than they could be hauled to the recycling bin. But when you consider how the speed and volume of transactions has increased, every desk should be piled to the ceiling and the aisles crammed full of paper documents. All the paper you don’t see is in the form of bits and bytes on hard drives spinning away inside your computer and in network storage within the data center. It’s turned out that less paper is the minor benefit of computerization. The big benefit is speed.
We simply do more faster. Companies don’t mail us product brochures anymore. We pull them up online. The time from identifying a need to researching solutions to placing an order has shrunk dramatically. It can all be done from the comfort of the desktop, sometimes in a matter of minutes. Need to coordinate team activities? Let them collaborate online so that those in Seattle can mark up documents for those in New York in real time.
Nowhere has the demand for speed become more dramatic than in the financial industry. You’ve heard of high frequency trading? These are complex algorithms running on high speed servers to electronically issue buy and sell orders to the markets. We’re at the point where milliseconds and even microseconds make a difference in trade profits. The Einsteinian limit of how fast light can move through glass and wire introduces a time delay between locations that simply can’t be reduced. So, how do you beat the competition? You get closer to the markets... physically closer. That’s what Telx provides. Its proximity to the exchanges and the buy-side and sell-side firms at Telx’s strategically collocated facilities. If the upper limit to your potential speed of transaction is a length of patch cord, you are in an advantageous position compared to the competitor hundreds or thousands of miles away.
Low latency colocation facilities near the action are essential for the most advanced players in high frequency finance. But there are other reasons for collocating with suppliers, customers and service providers. The cost of bandwidth is a good reason. With many competing carriers within arm’s reach, or at least down the hall, you’ve got access to the best rates per Mbps or Gbps and none of the expensive build-out costs of stringing wires or fiber cable for miles. If bandwidth is becoming one of your biggest expenses, moving to the colo facility can be a major cost saver. This can easily be the case if your product is video or high volume e-commerce or a popular application with millions of users.
Even smaller companies that aren’t located in a downtown sweet spot for low bandwidth prices may find that colocation gives them the advantage of keeping their physical location where it is but moving their bandwidth-hungry applications to where costs are lower. Cloud computing is another way to leverage the economy of scale in putting the software and servers where the bandwidth is cheapest and accessing the service from wherever you choose to be.
Does your company have demands for low latency or high bandwidth that would benefit from Telx or similar facilities? Are you just looking for ways to reduce your bandwidth costs? If so, you should take a look at the
cost advantages of colocation and cloud computing services.
