Boston Start-Ups Say Colocation Pricing Continues to Rise


Boston, Massachussetts is a booming center of economic activity. The technology, health care and finance industries are flourishing in the New England city. Because of the powerful economic and technology needs of these burgeoning sectors, there are a number of excellent Boston metro area colocation data centers available for your firm to obtain the server space and IT resources that you need. Some of the most popular data centers in the city are located in the heart of Boston Proper and its bustling tech and finance sectors, while there are even more colocation centers available outside the city. These include several facilities rated tier 2 and tier 3 to the north and west of the city, in small towns and suburbs stretching from the city’s center.

Why is Boston Colocation Pricing so Much Higher than other Parts of the Country?

There is a growing drive toward colocation in Boston, where business-critical servers and IT gear are maintained off site in professional data centers designed for the purpose. Some influences for this trend include:

  • First, Boston has a large number of data centers. If you’re located in Boston or near Route 128, the central core of the technology sector, you’re sure to have at least a few data centers near your business with a flourishing colocation model.
  • Second, Boston is also a hub for venture capital investors, which makes it also a strong hub for technology startups. Startups need the power and shared resources of a colocation center like dedicated hosting or cloud resources.
  • Third, Boston is the center of all New England internet communications traffic.

However, despite the fact that Boston is a flourishing home for colocation businesses, pricing for these hosting services continues to be higher than in many other U.S. markets across the country. Some reasons for this include:

  • Costs of bandwidth – Due to a limited amount of competition and a smaller number of underlying service providers, bandwidth costs in Boston and in Massachussets generally outstrips the cost of bandwidth in other parts of the United States. While bandwidth in Boston regularly runs $10-15 per Mbps, elsewhere in the United States this rate is closer to $5 per Mbps.
  • Physical location costs – In Boston, commercial and residential real estate come at a premium. Real estate prices in Boston have been on a continuing upswing since the recent recession and are close to their market high prices at present. Even major markets like New York City and Washington, DC don’t see quite the real estate cost escalations that Boston does.
  • Electricity and power prices – Power and energy are key to running a strong colocation data center. With powerful servers like blade and U servers at work, strong cooling fans are necessary to keep these slim, strong servers running safely. In order to make money and continue to stay in business, power costs are passed through to colocators at a data center. In Boston Massachussets, energy costs over 50 percent more than the national average, $13.17 per kilowatt/hour compared to an average of $7.84. Those high power prices in an energy-intensive industry also drive up colocation costs.

When you’re considering server or IT colocation, proximity to the office is usually a major concern. While you’re saving time, money and resources by keeping IT tasks and a server room outside of your business’s offices, it’s important that you can obtain physical access when necessary. This means that choosing a data center that is physically convenient to your company is often a major concern of clients. Given the above pricing factors, this does mean that colocation in Boston can come at a higher cost than other parts of the country.

However, there are a number of data centers in the business who want to do their best to welcome your critical IT systems and important gear to their centers. You can take a site tour and review a number of proposals to ensure that you’re not only receiving the right price, but also finding the best data center for all of your business’s needs.