More Free Colo

It didn't take long for Cogent's offer of free colo space for bandwidth customers to prompt a response from other providers. On Sunday, network services provider LayerOne extended a similar offer, and yesterday regional colo player OpticFusion followed suit.

"We see the larger companies doing this, and we thought the smaller customers could benefit from this as well," said Rick Shanaman, President of Optic Fusion, which operates out of the Perkins Building in Tacoma, Washington. The company is offering customers a choice of a free cabinet with the purchase of 2 megs or more of bandwidth, or 1 meg of bandwidth free with the purchase of a rack or half cabinet.

"Let's face it, things are very competitive right now," said Shanaman. "We take pride in designing services to achieve each customers' need. The big guys are not the only or best option."

Last week I wondered aloud whether Cogent's move was a reflection of the company's business model or the realities of the marketplace. What's clear is that the current market dynamics - featuring lots of vacant or underused floor space, an IT spending slump, and fierce competition for customers - make it harder for providers to ignore competitors' aggressive pricing.