Can data center colocation help your business be more recession-proof?

March 2, 2023


Recession is a word that no one wants to hear. When economic growth goes into reverse, people and businesses face the threat of a downward spiral of shrinking revenues, budget cuts, and job losses. Yet recessions are a natural part of the overall economic cycle. Longer-term trends still continue. What makes the difference is how you and your enterprise navigate through recessionary times. 

While budgets may be tighter and resources more scarce, data and applications remain vitally important for many business operations. To do more with less, colocation of your IT servers in an external data center can be a smart way to weather a recession. Better still, this solution can empower you to strengthen your business and make the most of the economic recovery to follow.

What is the impact of a recession on businesses and their IT?

When fewer customers buy less from your enterprise, your revenues drop, and costs may need to be cut. Depending on the severity of the recession, certain projects may be slowed or paused. Hiring may be frozen. Redundancies may be on the horizon. 

The timing can be particularly challenging if your company is in the middle of strategic projects like major new product developments or IT overhauls. Should you ask for more credit from your bank? Or should you reduce expenditure, and if so, where and by how much?

Some business operations and projects are more important than others. Digitalization and technologies like analytics, computer-aided design, and machine learning may be critical to your business for staying competitive and efficient. Your IT servers, applications, and networking must provide the computers, data storage, and connectivity to the levels required. 

On premises solutions may offer low latency and fast networking between local systems. However, they come at the cost of running your own data center. Expenses include not only the machines, but also data center staffing, power, cooling, maintenance, back-up systems, external connectivity, and physical security. Even if you cut back on usage of your data center, it may not be possible to reduce certain fixed costs.

Ideally, you’d like a solution that lets you do more while costing you less. For example, a good colocation data center generally offers better power options and connectivity, tighter physical security, and lower energy costs, compared to an on premises facility. A reduction in headcount for your own onsite data center operations can also be the opportunity to redeploy knowledgeable staff for other value-added IT activities.

Are recessions all bad?

Depending on your enterprise and market, you may find that a recession has a silver lining. It can be a chance to step up marketing and sales for new customers that can use your products and services to help them out of an economic trough. If your competitors are cutting back on their own development and launches, a new product introduction could put your company ahead.

Such initiatives will need funding. But if you can save money elsewhere, for example, by colocating servers instead of paying for your own data center, that funding can become available, even in recessionary times. In addition, a colocation data center may open other business opportunities for you, by letting you pursue the digital transformation of your company more cost-effectively for higher business performance and success.

How a recession may impact your IT operations

The uncertainty caused by recessions can make it difficult for enterprises trying to plan their IT. Committing to your own new data center capacity could be catastrophic if a recession hits at the wrong time. While some organizations may have specific reasons for building and running their own data centers, others would rather avoid the expense and the risk. It’s not necessarily a matter of size either. Larger enterprises need smarter hosting solutions for their IT servers just as much as smaller enterprises.

Your data, applications, servers – what are your options?

Data center colocation lets your business expand beyond the capacity of an existing data center or simply avoid building one in the first place. Most enterprises and organizations are not in the data center business. Their value and expertise is in manufacturing consumer and industrial goods, constructing homes, offices, or highways, providing energy, water, or transport, and serving consumers, clients, or communities. 

So, it makes sense for these enterprises to focus on what they do best, and to use the services of another company that specializes in data centers and colocation. eStruxture is an example, as the largest Canadian data center colocation platform with data centers strategically located in all the major Canadian markets.

With colocation, your servers are housed in the provider’s physical colocation data center. eStruxture also provides sustainable and scalable space, power, cooling, connectivity, and bandwidth. Reliability is ensured by redundant data center systems, security by robust physical protection and a team of support specialists who are available around the clock.

Let’s look at the three main ways in which colocation can help you reduce your IT CAPEX and OPEX while ensuring reliable performance and compliance.

  • Lower cost for space - by leveraging the existing infrastructure of a colocation provider, you avoid the capital expenditures and ongoing operational costs of building (or renting) and maintaining your own data centers.

  • Lower cost for power – data centers use advanced cooling technologies and oftentimes renewable power to minimize energy costs, which not only lowers your cost but also helps you reduce your carbon footprint.

  • Lower cost for personnel – when you partner with a colocation provider you get access to dedicated IT and data center professionals who provide expert support for your IT infrastructure and servers around the clock. Thus, no need to hire, train, and retain in-house IT infrastructure resources.


Data center colocation of your IT servers can help you beat a recession. Capital and operational expenses can be reduced compared to on premises data centers, while benefiting from higher levels of reliability, performance, and security. At the same time, you keep control of your IT including your data, applications, security, and adherence by users to the IT policies of your enterprise.

In fact, rain or shine, colocation can simply be the better solution. You don’t have to wait until a recession sets in to get the advantages. The flexibility and quality of a colocation service like eStruxture let you adapt whatever the economic conditions, including making the most of unexpected opportunities.

Want to know more about how using eStruxture services could benefit your business?

Contact us today for a free initial discussion!

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