The Basics of Demarcation

by | October 28, 2018 | Blog

A Little Definition

When a colocation customer needs to connect to another company, such as a network service provider, or a cloud service provider, the two companies must be connected by what the industry calls a “Cross Connect” which is a physical connection between the two customers. Whether you have one server rack in a shared colocation data center or a few hundred server racks in a dedicated colocation room, the customer(s) and the colocation company must agree where that physical connection starts and stops.

That physical connection will be located in a Demarcation Panel, also referred to as a “Patch Panel.” The demarcation panel is a piece of equipment with multiple jacks for connecting fiber and/or copper cabling. The location in that panel where the physical hand-off of information occurs is called the Demarcation point, or “Demarc.” In short, the Demarc is a specific point in your patch panel.

The Different Types of Demarcation

There are four main types of interconnection demarcation within a colocation data center:

  • Server Rack Demarcation: This is the most common form of demarcation in retail colocation environments. The colocation company hands off cross connect(s) in a patch panel installed directly in a customer’s server rack
  • 2-Post Rack Demarcation or Network Rack Demarcation: This is designed exclusively for network interconnection and is the standard relay rack found in Meet-Me Rooms. There is no power or customer equipment installed into these racks, and there are typically two patch panels located in these racks — one for fiber and one for copper.
  • Ladder Rack Demarcation: For colocation customers in dedicated cages with minimal cross connects, this is a common demarcation point whereby the colocation company will place an elevated patch panel directly above the ladder rack or a suspended patch panel directly below the ladder rack for hand-off to the customer cage.
  • On-Cage Demarcation: As the name suggests, this is a demarcation point in which the patch panel is built into the wall of a customer’s cage. This allows colocation technicians to install cross connects without entering the cage. The technician connects Customer A to Customer Z’s patch panel, and Customer Z, can then access the patch panel from inside its own cage, to extend the circuit to its equipment and complete the connection. Included in the installation costs of on cage demarcation, a technician from the colocation company will typically provide a “Fiber Raceway” from the patch panel to the server rack closest to the patch panel.

Your Demarcation Responsibilities

On your customer invoice or quote, you may see charges related to the physical demarcation panel and the labor involved in setting up the cross-connect between the two companies. This is usually a one-time fee referred to as a “Non-Recurring Charge” or “NRC” in the industry. Even when it comes to on-cage demarcation where installation is typically included, additional cabling beyond the first cabinet can lead to additional fees.

Beyond costs paid to the colocation company, you may also incur costs to make the final connection between your Patch Panel and your equipment. In nearly all contracts, the colocation company only provides the proper cable pathway connections between Patch Panel A and Patch Panel Z, but they do not connect those panels to customer equipment without additional fees.

If you are clear on where the colocation company’s responsibilities end and yours begin, you can avoid unexpected costs or stress. Our software helps you do this by highlighting included services and costs, so you can make procurement decisions with confidence.

Use our data center marketplace to find colocation facilities that meet your specifications and pricing needs, or connect with one of our advisors.

Alex Cole

Alex Cole

Alexander Cole has over 15 years of experience building both B2B and B2C brands for companies at various stages of growth across a range of industries, including media, music and financial technology.

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