IT BEST PRACTICES

Subscribe to
IT Best Practices.

STAY CONNECTED

    Why Colocation Server Hosting Makes Sense: The Economy of Scale Effect

    Everyone benefits from the economy of scale effect. For the lone individual to locate and dig out of the ground the iron ore and various alloy additives and then proceed to produce an alloyed steel cutting knife is cost prohibitive. It’s far easier to take advantage of the chains of businesses that produce the alloyed steel, manufacture the knives, and distribute them to nearby store outlets.

    The knife’s low cost that you see at the store is due to the fact that each business in this supply chain is large enough to achieve a sufficient economy of scale to produce the steel, manufacture the knife from the steel, and warehouse and efficiently distribute the knives at a low enough cost to remain competitive as businesses.

    In addition to being of sufficient size, each business for the most part specializes in either making metals, manufacturing consumer products with metal components, or in transport and distribution. Specialization allows each business in this chain to employ experts or at the very least, use employees who are highly proficient at the specific tasks necessary to produce their product or provide their service.

    The economy of scale effect allows individuals to own comfortable homes, cars, computers, mobile devices, and the other possessions common in our society. In the same vein, businesses also benefit from this effect so that they can focus on their specific missions. There is no reason why companies, especially small and medium-sized, should not take advantage of the many business services and products such as off-the-shelf software. Why hire a staff of software engineers to create office productivity software when superior off-the-shelf versions are available for a fraction of the cost?

    Colocation Server Hosting and the Economy of Scale Effect

    Like the lone individual fabricating all of his needs from scratch, the business that spends money on server and related hardware as well as on staff to store their data fail to take advantage of the economy of scale benefits of outsourcing this need to colocation server hosting providers who specialize in this service.

    These providers employ specialized staff with the skills to maintain the necessary hardware, and to keep the hardware and the data within safe from both online and offline threats. Protection from malware, hackers, viruses, power loss, extreme weather events, and theft are just a few of the security benefits that the colocation server hosting company can provide.

    The business with their own servers have the choice of either shifting resources away from their core business to adequately maintain and protect this hardware and its data, or of running the hardware on a shoe string budget which places their data at risk. This resource usage vs risk balance places them at a competitive disadvantage with businesses that take advantage of the economy of scale benefits inherent in outsourcing one’s data storage. To learn about our colocation server hosting services, contact us today.

    Why Colocation Server Hosting Makes Sense: The Economy of Scale Effect

    Everyone benefits from the economy of scale effect. For the lone individual to locate and dig out of the ground the iron ore and various alloy additives and then proceed to produce an alloyed steel cutting knife is cost prohibitive. It’s far easier to take advantage of the chains of businesses that produce the alloyed steel, manufacture the knives, and distribute them to nearby store outlets.

    The knife’s low cost that you see at the store is due to the fact that each business in this supply chain is large enough to achieve a sufficient economy of scale to produce the steel, manufacture the knife from the steel, and warehouse and efficiently distribute the knives at a low enough cost to remain competitive as businesses.

    In addition to being of sufficient size, each business for the most part specializes in either making metals, manufacturing consumer products with metal components, or in transport and distribution. Specialization allows each business in this chain to employ experts or at the very least, use employees who are highly proficient at the specific tasks necessary to produce their product or provide their service.

    The economy of scale effect allows individuals to own comfortable homes, cars, computers, mobile devices, and the other possessions common in our society. In the same vein, businesses also benefit from this effect so that they can focus on their specific missions. There is no reason why companies, especially small and medium-sized, should not take advantage of the many business services and products such as off-the-shelf software. Why hire a staff of software engineers to create office productivity software when superior off-the-shelf versions are available for a fraction of the cost?

    Colocation Server Hosting and the Economy of Scale Effect

    Like the lone individual fabricating all of his needs from scratch, the business that spends money on server and related hardware as well as on staff to store their data fail to take advantage of the economy of scale benefits of outsourcing this need to colocation server hosting providers who specialize in this service.

    These providers employ specialized staff with the skills to maintain the necessary hardware, and to keep the hardware and the data within safe from both online and offline threats. Protection from malware, hackers, viruses, power loss, extreme weather events, and theft are just a few of the security benefits that the colocation server hosting company can provide.

    The business with their own servers have the choice of either shifting resources away from their core business to adequately maintain and protect this hardware and its data, or of running the hardware on a shoe string budget which places their data at risk. This resource usage vs risk balance places them at a competitive disadvantage with businesses that take advantage of the economy of scale benefits inherent in outsourcing one’s data storage. To learn about our colocation server hosting services, contact us today.

    Subscribe to
    IT Best Practices.

    STAY CONNECTED

      ALL ARTICLES

      Cloud Services

      Component Highlight: Veeam Data Protection and Backup

      READ MORE
      Cloud Services

      Meet the team – A word (or two) from our CEO, Reyner Natahamidjaja

      READ MORE
      Cloud Services

      Why you need a full cloud platform, and the pitfalls of going piecemeal

      READ MORE
      Cloud Services

      Component Highlight: IBM Flash Storage

      READ MORE
      Cloud Services

      Can You Trust Your Old Data with Hyperscale Providers?

      READ MORE
      Cloud Services

      Increasing Data Integrity & Security through multi-site replication with CloudKey

      READ MORE
      Cloud Services

      The Dissolution of AWS and their Cloud Monopoly

      READ MORE
      Cloud Services

      Meet the team – The Insights of Chris Martin

      READ MORE
      Cloud Services

      Component Highlight: Palo Alto Firewalls and Edge Security Services

      READ MORE
      Cloud Services

      How the right cloud platform can reduce your RTO and RPO

      READ MORE

      You Have The Momentum. We Help Keep It Going.

      At Global IP Networks, our mission is to keep your net working. Our team of dedicated, certified IT experts is 100% committed to your success. For over 20 years, we’ve relentlessly helped companies like yours tackle their IT challenges to maximize the security, uptime and performance of their networks.

      That’s tenacity. That’s Global IP Networks.

      wLearn More