Colocation’s Relevance Today for Business

The past several years have shown a “cloud-first” strategy evolve for business with their IT infrastructure. The inclination for a total on-premises infrastructure has decreased as hybrid cloud solutions have expanded. While off-premises solutions are the up and coming choice for many businesses, on-premises continues to be utilized with most companies. As businesses look at their IT strategies for the future, they should explore options to the cloud and consider the reasons why cloud may or may not be the best fit for all their applications. Businesses have seen the value of taking their data off site for years without handing it over to a cloud provider. The primary alternative has been collocation (colo). Many have seen a renewed interest of colo with the growth of hybrid cloud, as the large public cloud providers have implemented changes to their products to promote hybrid cloud architectures.  Here I will review these changes and discuss colocation’s relevance today for business.        

Colo defined and best use cases

Colo allows organizations to continue to own and maintain control of their IT hardware while taking advantage of an off-premises solution that offers increased uptime and security. As a part of the colo agreement, the data center will offer space, power, and bandwidth to its clients in a secured and compliant area within their facility. Although data centers are some of the most secure places in the world, they still can offer their clients access to their IT resources 24 hours a day, 365 days a year. They accomplish this through multiple layers of security including security guards, video monitoring and biometrics. This ability for colo customers to access and touch their data provides a psychological advantage for many businesses.

Another advantage of colo is power which can be offered with options including multiple power utilities. Redundant power offers additional safeguards against an IT outage. This type of power configuration is not available in most business’s office buildings. Also, a data center can offer power at a reduced rate because of their purchasing power with the utility. With more power comes more cooling requirements. The data center also provides better cooling, again with spare resources to assure it’s always available. Finally, bandwidth is a commodity the data center buys in bulk and offers to its colo customers at savings.

Regulatory compliance is another important advantage driving users to a colo solution. Colo provides its customers instant access to an audited data center, such as one with SOC 2 compliance. Colo has long been believed to offer more security and compliance than on-premises or cloud.

Considerations before moving to colo

The primary items to consider before moving to colo in a data center relate to the space and power components of the solution. Colocation space is typically offered by the data center provider by the rack or by a private cage consisting of multiple racks. In either offering, a prospective buyer should consider the requirements for expansion of their infrastructure. In a cage, a customer is typically offered “reserved space” within that cage to be purchase and can then activate when required. When the customer doesn’t require the segregation of a cage, they will purchase racks that are adjacent to other business customers, which can make expansion more complex. Customer-focused data centers allows a business to reserve adjacent racks without activating the power and therefore are priced at a discounted rate. It is important to have contiguous space in a data center colo so consider additional space for growth with the initial purchase. 

Regarding power make sure you research the amperage and voltage requirements for your infrastructure and its potential for growth. Data centers will have many diverse power offerings so consult with an expert like TEOM for the requirements of your IT equipment.

Today’s evolving advantages of colo

Most of today’s business IT infrastructures, on-premises or colocation, will utilize some type of cloud presence for required applications such a disaster recovery. The byproduct of this growing trend is hybrid cloud implementation. Like the term cloud, a hybrid cloud can have many definitions. For our purposes here, hybrid cloud will be defined as resources complementing your primary on-premises infrastructure with a cloud solution. The large public cloud providers, most often used by businesses, have expanded their presence beyond their own data centers to occupy a cage of colo in large multi-tenant datacenters. This enables the cloud providers to get physically closer to their customers, which creates an advantage for a business user in that data center needing to implement a hybrid cloud solution.

Previously, customers of the large public clouds have relied on either the internet for inexpensive connectivity or expensive dedicated telecom circuits to connect “directly” to their cloud provider. Direct connections have been prohibitively expensive for most businesses because of the high cost of telecom circuits that are required to reach the public cloud. Some have justified the high cost of direct connect due to increased security and the greatly reduced costs of data egress. Egress charges are the cost to move data from the public cloud to the business. Typical egress charges for public cloud providers can be as much is $.14 per gigabyte. When direct connections are established egress charges are greatly reduced to as low as $.02 per gigabyte as of the time this article was written. Because of this direct connect can save users thousands of dollars while greatly increasing security. When the public cloud provider is in the same data center as the colo customer a direct connection to take the form of a “cross connect” within the data center. This common data center service is a fraction of the cost of the telecom circuits mentioned previously. This enormous economic benefit can be multiplied if the business connects to multiple public clouds (multi-cloud).

A more recent trend has the large public cloud providers creating a hybrid cloud on the customer’s premises. Microsoft’s solution, called Azure Stack, was the first introduced, and now has a competitive product from AWS called Outpost. The products, to be covered in a future article, put the hardware and cloud infrastructure of these providers on the customer’s site. This creates additional validation that hybrid is here to stay.

Colo remains relevant today for many of the same reasons it has been chosen for years: availability, security, and compliance. As the large public cloud providers expand outside of their own data centers to get closer to their customers, new advantages for businesses have emerged. When a fiber cross connection in a common data center can be used to direct connect to a public cloud provider, enormous benefits are realized. Ironically, as the public cloud providers grow, colocation has found new life and will remain relevant for the foreseeable future.

If your business wants to stay competitive in this ever-changing environment

Contact us @ Jim Conwell (513) 227-4131

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From Meaningful Use to MACRA or… When the MIPS comes Down?!


Most of us who have been in the business of healthcare for 5 years or more are familiar with the term “Meaningful Use.” For others, let me define “Meaningful Use” at it will serve as the basis for this blog. Meaningful Use was a program implemented by the governmental agency, “Centers for Medicare and Medicaid Services” (CMS) to measure and reward medical practices for the use of Electronic Health Record (EHR) technology. EHR is the software a medical practice uses to manage its business and store all Protected Health Information (PHI). I believe Meaningful Use was a success. It brought a much greater awareness to EHR technologies, and pushed practices small and large to evolve, and store their PHI electronically. Storing information electronically in turn allowed medical practices to provide a better level of service, care coordination and sensitive data security to its patients.

You may have noted I used 3 three letter acronyms (TLAs) in the first paragraph. This comes with working with information technology and is multiplied by government bureaucracy.   There are plenty more to come, so I will document the rest up front, right now! 

1.    MACRA- Medicare Access and Chip Reauthorization Act

2.    QPP- Quality Payment Program

3.    APM- Alternative Payment Model

4.    MIPS- Merit-Based Incentive Payment System

5.    EC- Eligible Clinician

The next year brings the sequel to Meaningful Use, MACRA and the payment system within it: MIPS. The QPP final rules were posted on November 2, 2017 giving participants two months before reporting starts on January 1, 2018. Nearly all healthcare providers, physicians, physician assistants and nurses must participate. The scoring for MIPS will be based on a point system, look for future BLOG’s to take a deeper dive on MIPS including the point system.

A practice that bills Medicare Part B* claims in an amount less than $90,000 or has fewer than 2,000 Medicare claims is not required to participate. The smaller practices that do report receive some breaks; groups from 1-15 clinicians get an automatic 5 points, even if completing the minimum amount of reporting. Groups of 1-10 clinicians can team up with other smaller groups to combine reporting, regardless of location or specialty. This will allow some “rock-star” practices to report with lesser groups allowing all to benefit from the payment program.

MIPS reporting for 2018 will be divided into 4 categories, each of which will have a different weighting. Additionally, the weighting percentages are set to change in years 2019 and 2020. The following are the four reporting categories and their weights:

  1. Quality (60%) – The practice selects at least 6 measurement criteria to report on from a choice of over 300. Some are general categories and some are for specialty practices. For example, a cardiologist may report on measurements for controlling high blood pressure among all their patients. Quality is the only category that must be reported on for the entire year.
  2. Advancing Care Information (25%) – ACI includes all the measurements that were a part of Meaningful Use. It measures how the practice promoted patient engagement (patient portal) and exchanged information using EHR technology.
  3. Improvement Activities (15%) – The primary focus on Improvement Activities will be on care coordination, which is the ability to work seamlessly with other providers. Additionally, providers will have a list of over 900 categories and 9 sub-categories to report on.
  4. Cost (no mandated reporting in 2018) – This information will be based on data from Medicare claims received.

MIPS reporting options for 2018 

  • Option 1 – Submit “some data”- Quality is the only data that must be reported for the entire year. Enough data for 15 points must be reported.
  • Option 2 – Quality full year – Submit Quality full year, Advancing Care Information and Improvement Activities for 90 days.
  • Option 3 – All categories full year- Cost not reported in 2018

A practice can pick any of the options they choose, most likely it will be driven by their understanding of the program and the resources they assign to it.

More will be revealed on MACRA, MIPS and the best practices for reporting in the coming months. Due to the consequences of failing to report, and the urgency of a short preparation period, many healthcare organizations will need assistance with reporting. MIPS has much greater consequences than Meaningful Use.

First, all information submitted for reporting will be public. We will see reported information on CMS websites allowing you to compare providers, like we look at online reviews for traditional business today. Secondly, MIPS does more than just reward compliant practices, it also penalizes non-compliant ones. Meaningful Use was initiated as an experiment to some extent. MIPS seems to be making the transition to a regulation that is here to stay. Healthcare organizations will either need to get on board or face serious consequences.

Given the importance of MIPS to the healthcare industry, and the continued flow of information to this day, we will provide another update to this before year-end. Please look for a deeper dive on MIPS information including components not covered here, like how the points system works and Alternate Payment Methods (APM), that will become more important in the years to come.

*Medicare Part B is the portion of Medicare that pays for ambulatory services such as doctor office visits and prescriptions. Part A applies to hospital stays.


To meet and learn more about how MIPS reporting can affect your organization contact me at
 (513) 227-4131 or