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

Posted by QuoteColo on November 07, 2013 - Updated on November 21, 2013


boston colocation pricing

Even with the recent economic downturn, Boston, Massachusetts is still a hot spot for high technology, finance and healthcare companies. If your firm is considering a Boston colocation data center, you have plenty of options to pick from in the Metro Area. In Boston Proper, One Summer Street and 109 Brookline Ave are two of the more popular data center locations. North of Boston, clients can get quotes and site tours from data center operators in Somerville, Medford and Andover, MA. West of Boston, there are several tier 2 and tier 3 rated data center facilities in Billerica, Waltham, Watertown, and further out in Westboro, MA.

Boston Colocation has become very popular for several reasons:

  • Boston is littered with Venture Capital Firms looking for the next best startup. Startup companies typically require data center services – colocation, dedicated hosting and cloud computing.
  • Boston Data Centers are very abundant with a very strong “sales push.” If your business is in or near Boston or Rt 128 (America’s Technology Highway), there are several public data centers near your office and you have probably already heard from their sales team. To find a few Boston data centers, check out our Boston Colocation page.
  • Boston is the main hub for Internet traffic in New England.

With all this positive news about the Boston Colocation scene, let’s talk about the downside! Boston Colocation pricing is much higher compared to other major cities across the United States. Let’s review why….

1)      Power Costs – With the advent of per U and blade servers, power is king! These streamlined servers are power hogs and need to be cooled. To turn a profit, data centers must pass these additional power costs on to their clients. According to the Energy Information Administration, Massachusetts Industrial power cost is $13.17 per kWh which is 50% more than the natural average of $7.84.

2)      Bandwidth Pricing – Massachusetts has not caught up with the rest of the country on bandwidth pricing. I wish I had the magic pill or answer but I truly do not. It is most likely due to the lack of bandwidth competition (discount provider Hurricane Electric has not entered the market yet) and provider greediness. Bandwidth rates are still in the $10-15 a Mbps range. In other parts of the US, clients can find bandwidth rates for less than $5 a Mbps.

3)      Real Estate Costs – After the recent recession, Boston’s commercial real estate is leading the recovery when compared to other major cities such as New York and San Francisco. According to the Boston Business Journal, Boston’s commercial real estate values are less than 1 percent below their market peak in December 2007. New York City was at 7.5% less and DC was at 5.7% less.

Since the majority of Boston colocation clients want to be near their critical IT gear, get ready to pay a premium. When selecting a Boston server hosting company take the time to review multiple proposals and to do site tours. QuoteColo is based in Massachusetts and we can assist you with your search in finding the most qualified and cost-effective colocation provider.

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