9 Key Considerations for International Colocation

by | August 3, 2023

When expanding your business globally, navigating the complexities of selecting an international data center requires careful planning and evaluation. Many companies feel unsure of where to begin when leaving their well-known domestic market, but they do know the importance of having a partner that understands the implications of each location and country. Strong and tested relationships are even more vital and valuable during this time of discovery, exploration, and new business goals that come along with establishing an international data center presence and partnership. Here are nine key considerations for international colocation that will help you make well-informed decisions for your business. 

1. Location, Location, Location

Of course, your business needs will dictate the general region you need to be looking at; Asia Pacific (APAC), European Union countries (EU), Middle East-Northern Africa (MENA) etc. so once you know the region where do you go from there? To start, you should look at access into a country, transportation, communication infrastructure, and a few of their data centers as well.  You can narrow down many cities in each country by the accessibility to local airports and undersea cable landing points. The last thing you want to do after a 10-hour flight is drive several hours. Maybe the very well-priced Tier IV data center is worth the drive, but you should consider the distance, and if you really like that remote location for a data center, that travel distance can serve as leverage when negotiating the terms of your agreement. 

2. Government/Regulation

Even if you would prefer to avoid the subject of politics, you will need to do some important research on the countries within your chosen region(s). For example, is the government stable? Do you know any colleagues that have done business in these locations before? What were their experiences? Is the telecommunications industry predominantly run by the government? We all know that some countries have less stable governments than others, and some are more restrictive (think COVID-19). We have also learned that locations that seem friendly to international business initially were not very flexible in their dealings later down the road. It is extremely important, where possible, to have some real-life experience from your network to help you avoid these time consuming, and potentially very costly and frustrating situations. It is always ideal to have an insider’s view when looking at the situation on the ground in any foreign country due to such great variability. Again, your business requirements are what need to be accomplished, make sure they can be accomplished in a region and country realistically. 

3. Costs & Currency Exchange

Many companies have a U.S. presence and can invoice your company in U.S. dollars. However, some companies will only bill in the local currency while others may give you a choice.  Depending on rates this could have a positive or negative impact, so be sure to consult your finance team. 

Another key consideration is the VAT (Value Added Tax), which is a consumption tax. The VAT can vary from country to country and can really add a great deal of additional cost to a project.  When you start putting all the taxes into the equation it can get very complicated so it’s good practice to make sure you involve your CFO early in your project discovery, as they are important to understanding what region or country will meet your overall needs and requirements. They can often turn into a good resource as well with their own colleagues and their experiences outside of the US. 

4. kW vs kVA

Kilowatt versus Kilovolt-amperes is not difficult, but something you need to make sure you consider when requesting quotes and preliminary proposals. If domestically you use 10kW per cabinet, don’t ask for a quote for 10kVA in Amsterdam. 10kW = 13kVA and 10kVA = 8kW. There are plenty of Colocation Power Calculators online for you to use and it only takes a minute. That minute of clarification up front can save you a lot of time later. 

5. Connectivity

Look at your connectivity options from all angles. You need to consider not just the number of IP Transit providers; but before you settle on a location look at the average cost per Megabit. If you’re looking for colocation in the APAC area, there is a real difference between the cost per Mb from Tokyo, Seoul, Hong Kong, Singapore etc. Do not buy data center space without including the cost of Internet Access in your overall evaluation, or you could find yourself upside down on what you thought was a great deal. You also need to consider what routes you’re going to buy and where your traffic is destined. Local routes may cost you much more than international routes if you need that low latency. Traffic into China from the surrounding countries will also cost you extra. These are important points to keep in mind and explore thoroughly before deciding on a data center facility. 

6. Audits

The data center industry has been working to establish standards that ensure reliability, security, and efficiency in data center operations. Many of the data center certifications are starting to standardize and more closely align with similar industry certifications and compliance regulations.  There are a few certifications you should keep an eye out for such as the IDCA, ISO, Tier certification, ISEA 3402, and CSA STAR.  

7. Technical support/remote hands

Depending upon the local presence you will have, or not, this item can be an extremely important consideration to explore thoroughly. What is the technical expertise of the local team running the data center? Are there any cultural or language barriers to consider? Maintenance schedules and holidays can also differ from what you are used to in the US. Odds are if you are based in Silicon Valley you won’t be flying to Singapore every week to perform maintenance or updates. Can you rely on the local team to help you with any and everything you might need? It’s usually a good idea to understand the capabilities of the on-site team and negotiate a smart-hands package into your contract, even for an additional monthly charge. 

8. Shipping & Customs

Have you ever shipped hardware or components only to have them arrive damaged, or worse the package simply gets lost? Getting your equipment into the desired locale can become very time consuming in some countries. In some cases, your standard shipping method may not be good enough to get your equipment in country quickly enough. You will also need to deal with Customs.  If you don’t have expertise in this space, it’s highly recommended to partner with somebody that can manage this with you.  

9. Interconnectivity

How much connectivity do you need between your international data center and your U.S. based operations? Is there a latency requirement? Do you need a direct route private line or would a switched network work well for you? How much bandwidth do you need? Some sub-sea cables are coming close to reaching capacity so the higher bandwidth may come at a premium. A good example would be connectivity to South Africa. They have had a few new cables come on-line, but they are still in a bandwidth crunch. If you need to move large amounts of data, it may require a more creative solution. 

All of this is at a high-level overview. There are many things that you need to consider when doing business overseas and UPSTACK technology experts have decades of industry experience working with the best global data center providers and will help you find the right solution for your business. We can provide valuable insights and guidance throughout the evaluation process to ensure you make an informed decision for your international colocation project. Learn more about our colocation expertise.