Colocation Brokers to Collaborate

Three colocation brokers from different regions - NEF Inc. of Massachusetts, Global Communication Networks Inc. of Pompano Beach, Fla. and Bandwidth Advisors Inc. of Seattle - are working together to form a "Colocation Consortium" that will share information about providers. The group is starting out as an informal group, but organizers expect it to become an incorporated entity with a charter and dues. The consortium may also expand to include other colo brokers, founders told Phone Plus.

One goal of the organizers is to share best practices regarding end-user contracts and services as well as agency agreements, which the founders say are inconsistent, with differences between the various agencies. "We believe that by sharing our experiences with the more than 200 colocation agreements between us we can set agreement standards for providers to follow," writes Michael Murphy on his NEF blog. "This is very important because colocation is more popular than ever. The need for better relationships and agreements with providers is imperative for customers. By eliminating inconsistencies we hope to prevent the risk of cut commissions and decreased revenue streams."

The reference to "cut commissions" suggests that the colo brokers believe that joining forces will give the combined entity better leverage with colocation providers. Another factor, as noted by Bandwidth Advisors' Aaron Loehr in the PhonePlus article, is that "unlike all the telco circuits that are constantly going down in price, colocation is actually going up in price. If you do it right, it's a more stable revenue stream."

Bandwidth is the primary business for GCN and NEF, who each get 20 to 30 percent of their revenue from colo, compared to 65 percent for Bandwidth Advisors.