Not all data centres are created equal: What every web hosting provider should know in 2025

Not all data centres are created equal. (Image: Supplied)

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In a market where power costs are rising and competition is fierce, choosing the right data centre isn’t just a smart move, it’s essential for protecting your profit margins and long-term sustainability.

With NERSA’s latest 12.74% hike announcement, web hosting providers are under growing pressure. Rising operational costs are eating into profits, all while providers face escalating customer demands, evolving tech requirements and the constant race to stay ahead.

In recent years, major web hosting providers have scaled rapidly, while ISPs and other service providers have expanded into hosting and virtual services to diversify and stay competitive.

For a while, the market delivered strong growth. But the game is shifting. Higher compute requirements coupled with increasing electricity tariffs are placing increased pressure on profitability. The industry’s aggressive pricing strategies have fuelled a competitive downward trend, forcing providers to deliver more value at lower cost.

Web hosting providers who want to maintain their profitability can no longer afford to overlook the cost of their data centre footprint.

One of the biggest concerns is billing transparency. Many data centres pass on price increases without clear justification, leaving customers like web hosting providers in the dark and out of pocket. As compute requirements grow and cooling becomes more intensive, operational costs will continue to rise – making it more important than ever to understand exactly what you're paying for and why.

• Am I only paying for the power I actually consume?
• What markups – if any – are being added to my electricity costs?
• Is the data centre’s cooling system truly optimised for efficiency or am I footing the bill for outdated infrastructure?

Smart cost control starts with transparency. The more you know about what you’re paying for, the better you can protect your margins.

Two colocation facilities might have the same base price, but power-related costs can significantly impact the total expense. Transparent, itemised billing – detailed down to the kilowatt per rack – makes it easier to spot inefficiencies and manage costs effectively.

Web hosting providers also need to consider what the data centres are doing to potentially reduce the impacts of rising power costs in future. Customers should ask: "Are data centres working to go greener? Are they finding better efficiencies?" These measures directly impact costs and the customer’s bottom line.

Rising power costs are just one part of the equation driving web hosting companies to reassess their IT infrastructure environments.

Another challenge is equipment ‘running hot’, throttling down into ‘limp mode’ or fans spinning up exponentially to provide more cooling but also consuming more power and causing a sequence of events that negatively impact their customers’ experience. Overcoming this requires advanced data centre design and efficient management, with live monitoring and detailed reporting on metrics such as equipment performance, power consumption, temperatures and relative humidity to support proactive management.

Some colocation facilities may have difficulty growing with their customers. As hosting providers expand, they may hit hard limits on space or power, forcing costly relocations. Flexibility to scale up or down is non-negotiable for sustainable growth. Hosting providers should assess whether their colocation service provider infrastructure can scale up or down as needed.

The right data centre doesn’t just host your infrastructure – it safeguards your margins, ensures uptime and positions you for future growth. Is yours doing enough?