A carrier hotel is critical for any major data center market. Carrier hotels allow dense network connectivity and a single place where network providers and customers can meet to inter-connect and exchange traffic.
Since march of 2019, with the acquisition of Metro Optic, Cologix has the monopoly on connectivity in Montreal. 1250 RL, and 875 STA are the two main data centers in Montreal where major carriers are present and where fibers coming from outside the city arrive.
So what is the issue?
A single provider
Many markets have one or two addresses where carriers meet-up, in which multiple carriers operate. For example, in NYC, 60 Hudson st. is probably the main address on the US east coast, just like One Wilshire is on the west coast. However, these addresses have more than one provider offering data center services at the same place. In Montreal, Cologix is the only provider present at the addresses we named earlier.
Let’s be honest, Cologix is going crazy with their cross-connect pricing. In the past, the cost was tolerable, but now that fiber cross-connects are C$300 MRC for enterprises and C$350 MRC for carriers, many small to mid-size ISPs are complaining about prices or just flat out unable to afford the bills.
Having little to no pressure from the market to improve their data centers, most downtown facilities operated by Cologix would really need a refresh. Other than the more recent expansion at 1150 RB, 1250 RL is starting to show its age and 875 STA is simply overdue in so many ways.
Looks don’t make the data center reliable, but they sure do make it nice to work at your facility. Its really infuriating to pay top dollar for average quality data center space.
Otherwise, just on data center tours, we had to wait a long time at some of their sites for a security technician to show up and get our visitor badge set-up. In our eyes, that’s a bad telltale sign regarding their services.
Why is nothing changing?
With all these issues, why is no one doing anything about it? We see many reasons.
Building a data center is not cheap. It can cost $7-10M to build a 1 MW data center. In the case of a downtown data center, it can cost even more due to very strict city rules and permits. No need to say that any business needs a sales commitment before putting down this much money.
Large network providers are not that affected
Large network providers like Hurricane Electric and Zayo aren’t really affected by this. These large corporations can typically afford the high prices. This forces small network providers and customers to pay-up to be able to reach their providers.
This makes it hard to push large projects. The pool of companies that complain about this situation need to connect to large providers, and as large providers are not really affected by high pricing, things don’t move that much.
The QIX (Quebec internet exchange) is also a major tenant for Cologix as it brings value to their offering. However, even if their exclusivity deal with Cologix is over, QIX has been very slow at making plans to deploy new POPs, which is not helping the situation.
Network ports are hard to move
Fiber takes time to be deployed and on the technical side, when an ISP has built a network core in a certain data center, its one hell of a job to move it without affecting production. Even if a new carrier hotel was built downtown, it would take many years for it to gain traction with new networks. Companies don’t want to pay cancellation fees on active contracts making it a long term investment.
Other downtown data centers are not prime candidates
Every other data center in downtown is either owned by an ISP (making it non-network neutral) or is at full capacity. eStruxture’s MTL 1 data center at 800 Square Victoria would have been great for this but is at full capacity.
Some say that Urbacon’s facility at 544 rue de l’Inspecteur would be a good facility for this, but Urbacon wants a very large tenant that will commit to a big amount of power. Clearly not a good match for a carrier hotel.
Long story short
Long story short, the current problem affects small and medium networks but the implication of large clients is needed to make the solution financially and technically worth it.
Want to build the next Montreal carrier hotel? We have a great network of people that want change. Let’s work together.