What Is Colocation and Is Colocation Hosting Right for Your Business?

What Is Colocation and Is Colocation Hosting Right for Your Business?


The data center colocation market is likely to grow beyond $50 billion by 2020. More companies are recognizing the benefits of server colocation so that growth will likely continue into the next decade.

If you’re wondering what is colocation and aren’t sure whether it’s the right choice for your business, read on. We’ll define colocation and look at some of its advantages.

What Is Colocation?

Colocation, or “colo”, means you physically place a server owned by your company in a colocation data center. You can configure the server however you wish – it’s no different than if it was running on your premises.


By placing it in a colo data center, you can save money, get better reliability, and protect your assets more effectively. This colocation article covers some of the trends happening in the colocation market.

Advantages of Colocation

Colocation lets you outsource most of the technical aspects of running and maintaining a server. The colocation company provides expertise in these areas, which means you don’t have to hire your own IT staff to manage the server.

Network Speed and Reliability

A colocation data center is purpose-built to provide a rock-solid connection to the internet. It will have a strong infrastructure that would likely not be cost-effective to set up on-site in your business. Because they deal with many different companies, the high cost of the network equipment gets amortized over many clients.

These data centers also offer better reliability. They have environmental controls to maintain the operating temperature of the servers in their care as well as physical security to protect the equipment from outside access.

Better Compliance

Some industries, such as healthcare and financial services, have very specific compliance requirements for any data stored on your servers. Some of these requirements relate to the physical server installation.

Once again, maintaining this compliance can be costly for a single business. Working with a data center that specializes in that industry will mean they are set up to be fully compliant from the start.

Geographic Flexibility

Another advantage available with colocation is flexibility in the physical location of your server.

Your company might be located in a different part of the world than the majority of your customers. Running your server on-site won’t always offer the best performance. With colocation, you can place the server in a data center close to your users so they get the fastest possible connection.

Colocation Costs

The cost of colocation is based on several factors:

  • Physical space required
  • Level of network connectivity
  • Power usage
  • IT support services required

This is on top of the cost of the server itself, of course.

Is Colocation Right for You?

What is colocation going to do for your business? Only you can make that call but consider all the advantages it offers versus doing all those things in-house. Unless you have a large IT staff and the infrastructure to match, there’s a good chance that colocation is the best choice.

Did you find this article helpful? Check out the rest of our blog for more interesting posts.



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