i/o Eliminates Cross Connect Fees

i/o Data Centers will eliminate cross connect fees for colocation customers, the company said this week. Phoenix-based i/o, which is in the process of completing a data center in Scottsdale, is planning to operate more than 1 million square feet of premium data center space in up to 10 markets.

"In an i/o building, you don't pay for a cross connect," said Tony Wanger, Senior Managing Director of i/o Data Centers. "When you colocate your IT equipment at i/o Data Centers, you pay one fee, and we worry about the rest. Every single cabinet comes with six cross connects, and every cage comes with a patch panel. We think it's the next logical migration for this industry."

Physical connections between networks are an important function of carrier-neutral data centers and multi-tenant carrier hotels (also known as Internet gateways), usually taking place in a central "meet-me room" (MMR). Facility owners typically charge fees for supplying these interconnections.

Connection fees became standard in the late 1990s, when telecom companies and network providers were the primary users of meet-me room and Internet exchange services. In recent years the customer base in many carrier-neutral data centers has shifted toward enterprise companies, Wanger said.

"We're in the data center business," said Wanger. "We sell an IT solution to an IT buyer. The users just want a turnkey service, like most of the IT services they buy." Wanger said i/o will serve as a "concierge" to handle cross connects for customers.

"The cross connect or meet-me room concept probably started at 60 Hudson Street (in New York) and One Wilshire (in Los Angeles), and was primarily telco driven," said Wanger, noting the most prominent carrier hotels in the industry. "They got the telecoms to pay for it, and it got pretty pricey. Over time, the model progressed, and sometime in 2003 or 2004, the carrier hotel and data center crowd started to mesh, and we started seeing more enterprise customers."

Wanger said i/o's new data center is half-leased ahead of a scheduled July opening, and that the company expects the facility to be fully-leased when it opens. Through May 31, i/o is offering 42U cabinets with power and bandwidth for $1,297 per month. Wanger says prospects have been enthusiastic about the free cross connects.

"Our customers love it," said Wanger. "The response from the industry has been muted. The carrier hotel owners make a lot of money off (interconnections). I'm a firm believer in the free market, and the free market will put this idea to the test. I don't doubt that cross connects will continue to be big business at places like 60 Hudson and One Wilshire. For i/o, it's something we now include."