Contracts
A colocation agreement is usually four documents: a master service agreement, a service order with the actual space and power, an SLA, and an acceptable use policy. The rate on the service order is the number everyone negotiates — and it is rarely where contracts go wrong. The expensive clauses are renewal, escalation, cross-connects and exit, and all four are more negotiable than the rate.
Also in this section: the data center SLA, decoded — availability math, credit mechanics and the exclusions that matter.
Twelve clauses cover what a colocation contract actually decides. For each: what it does, how negotiable it really is, and the specific failure mode to check before signing.
Initial commitment (typically 12–36 months) and what happens at the end: month-to-month, renegotiation, or automatic renewal for another full term.
Watch for Evergreen renewal with a narrow notice window — miss a 90-day window by a week and you owe another year. Calendar the notice date the day you sign.
What you are actually renting: specific cabinets or footprint, committed power in kW, and the density the facility will support in your position.
Watch for Power sold as "up to N kW" is a ceiling, not a commitment. The word that matters is "committed". Also check whether the kW figure is per cabinet or total.
Metered (you pay for what you draw, plus a committed minimum) or breakered (flat rate for the circuit capacity regardless of draw).
Watch for Breakered billing on a lightly loaded estate means paying for headroom permanently. Metered with a high committed minimum is breakered billing wearing a different name.
Uptime commitment for power and cooling, measurement method, credit mechanism, and exclusions. Detailed enough to have its own page.
Watch for Credits capped at a fraction of one month’s fee, claims that must be filed within days of the incident, and maintenance windows broad enough to exclude almost anything.
One-time and monthly recurring charges for connections to carriers and other tenants within the facility.
Watch for The headline rack rate can be undercut by cross-connect MRC. Ten cross-connects at $150–$300 each per month is real money that rarely appears in the first quote. Ask for a bundle.
On-site technician work billed hourly or by subscription: reboots, cable swaps, visual checks, media handling.
Watch for The billing increment. A 15-minute reboot billed in one-hour minimum increments at $150–$250/h adds up. Response time for emergency requests should be contractual, not aspirational.
Annual uplift on recurring charges — fixed percentage, CPI-linked, or (worst) at renewal to "then-current list rates".
Watch for Uncapped CPI linkage, or renewal at list rates with no cap. A fixed 3% annual cap is common and worth asking for. Power pass-through should reference a published tariff.
Who can enter, how they are added and removed, escort requirements, and shipping/receiving procedures.
Watch for Access list changes that require days of lead time make out-of-hours incident response impossible. Verify the 24/7 access actually applies to your tier of contract.
Caps on operator liability, your insurance obligations, and mutual indemnities.
Watch for Liability capped at a few months of fees is standard, which is precisely why the SLA credit mechanism matters — it is often the only remedy you will realistically collect.
Notice period, condition the space must be returned in, and what happens to your equipment if you leave late or the relationship breaks down.
Watch for Operator lien clauses that let the provider hold your hardware over a billing dispute. Negotiate the right to remove equipment while a dispute is being resolved.
Whether the contract survives your acquisition, the operator’s acquisition, or a transfer to an affiliate.
Watch for Operators change hands constantly in this market. Without assignment rights, an acquisition — yours or theirs — can turn into a forced renegotiation from a weak position.
PUE reporting, renewable energy attribution, and the data you need for your own emissions accounting.
Watch for If your company reports Scope 3 emissions, contractual access to facility PUE and energy-mix data saves an annual argument. Cheap to ask for at signing, hard to add later.
| Footprint | What realistically moves | What does not |
|---|---|---|
| 1–5 cabinets | Setup fee waivers, remote hands increments, a cross-connect or two bundled, escalation cap. | The rack rate. Retail pricing is retail pricing. |
| ~50–250 kW | Rate per kW, committed-vs-metered structure, cross-connect bundles, expansion options, SLA credit schedule. | Facility-wide policies: security, access regime, liability caps. |
| 250 kW+ | Nearly everything, including custom SLA terms, ROFR on adjacent space, and named remote hands response times. | Physics. Power that is not built cannot be committed, whatever the contract says. |
Before negotiating a rate, know the market: the Colocation Price Index publishes benchmark $/kW/month by market, and price history shows which way it is moving — in a rising market, locking the escalation cap matters more than shaving the day-one rate.
The contract under which a data center operator provides space, power, cooling and physical security for your equipment. It typically bundles a master service agreement (the legal frame), one or more service orders (the specific cabinets, power and pricing), an SLA (the uptime commitment and remedies), and an acceptable use policy.
Twelve to thirty-six months is standard. Shorter terms carry a price premium but preserve leverage; longer terms earn a discount but only make sense with a fixed escalation cap and an expansion option. Signing five years without a cap on renewal pricing hands the operator the negotiation.
Cross-connect pricing, remote hands rates and increments, the escalation cap, and renewal terms. Space and power rates move less, especially in tight markets like Singapore. Liability caps and security procedures barely move at all — operators run one regime for the whole building.
Automatic renewal. An evergreen clause with a 90-day notice window, missed, commits you to a full additional term for space you may already be leaving — and it compounds with a migration, where the exit date is exactly the thing that slips. Track the notice date from the day of signature, owned by procurement.
Read it first against the checklist on this page — standard agreements are written by the operator’s lawyers and every default favours them. For a small footprint you will not move much, but escalation caps, cross-connect bundles and remote hands increments are negotiable even at two cabinets. From roughly 50 kW upward, everything on the high-negotiability list is in play.
Tell us the market and the footprint — we return benchmark pricing and the clauses worth pushing on, so you know what a fair number looks like before the negotiation starts.
