Your colocation bill looks simple. Rent for the cage or cabinet. Power. Maybe a cross connect or two. That is the story on the summary page.
The real story is in the fees. Colo providers make money on the extras, not the rack space. And most of those extras have room to move.
Here is how to read the bill and which lines are worth a phone call.
Cross connects are pure margin
A cross connect is a cable. It runs from your cabinet to another tenant, a carrier, or an internet exchange in the same building.
The provider charges you a monthly fee for that cable. Often $200 to $300 a month per connection. The cable itself cost them a few dollars and one hour of a tech's time. Once it is run, it is close to free for them.
That is why cross connects are the first place to push. If you have five of them at $250 each, that is $1,250 a month. $15,000 a year for cables that are already installed.
Ask for a volume rate. Ask if a meet me room fee applies on top. Some providers stack both. You want to know before you sign.
Power is billed three ways, and one of them is a trap
Colo power shows up as a circuit charge, a usage charge, or both. The trap is the circuit.
You order a 20 amp circuit. You use 6 amps. The provider bills you for the full 20, or for 80 percent of it, because that is the safe draw limit. You pay for headroom you never touch.
Then there is the power whip. That is the cable from the power source to your cabinet. Providers charge an install fee for it, sometimes $500 to $1,500 per whip. One time, in theory. Watch for it showing up again on a cabinet you already had wired.
The fix here is measurement. Ask for metered power instead of a flat circuit charge. If you draw well under your breaker, metered billing saves real money.
The escalator is the fee you sign and forget
Most colo contracts have an annual price bump built in. It is called an escalator. Three percent a year is common.
Three percent sounds small. On a three year deal it is not. A $10,000 monthly bill grows past $10,600 by year three, and you never saw a new invoice line to explain it.
The escalator is negotiable at signing. Not after. Ask to cap it. Ask to remove it on a shorter term. Providers say yes more than you would think, because they want the term locked in.
Remote hands run by the minute
Remote hands is when the provider sends a tech to touch your gear. Reboot a server. Swap a drive. Read a status light over the phone.
The billing is by time, often in 15 minute or 30 minute blocks, with a one hour minimum on some contracts. A two minute reboot can bill as a full hour.
You cannot cut the rate much. But you can cut the usage. Set up out of band access so you can reboot gear yourself. That one change pays for itself fast.
What to do this week
Pull your last colo invoice. Circle every line that is not rent or metered power.
Then sort them. Cross connects and escalators are renegotiation items. Power whips and remote hands blocks are audit items, check for double billing and errors.
A colo bill is like a Comcast bill. There are about a dozen lines, and two or three of them are worth fighting. The trick is knowing which ones before your renewal clock hits 90 days out.
Not sure where your bill sits against the market? That is what we do.
Related reading
→ See what a full bill breakdown looks like
→ How to read your Comcast business bill