What is Colocation?

Colocation is where you rent space for your IT hardware at a 3rd party provider’s data center facility. Using colocation services can deliver advantages for your business that you may not realize using or building out your own data center facility. In this article, I take a deep dive into what colocation is, how it works, and its pros & cons. Continue reading to see if colocation is right for your organization.

What is Colocation?

Colocation involves housing privately-owned servers and other equipment in a third-party data center. Instead of networking equipment inhabiting a company’s in-house room, space is rented out. A colocation data center, or a third-party data center, acts as a place where servers can co-locate.

This means your data center may also be another company’s data center. You own the hardware equipment and the data center staff houses it for you. In some cases, the staff may also maintain the hardware.

When you opt to store your equipment in a colocation data center, you don’t have to choose just one. A company can have its servers located in multiple data centers. This is ideal for businesses that have large geographic footprints and want to keep their computer systems near every office they own.

Building your own data center may not be within the budget, even if you are growing at a fast pace. By understanding the key factors of a colocation data center, you may come to realize it is the best option for your business.


How does it work?

Your business will need its server hardware and software, but your hosting provider will ensure it all stays in top condition. Usually, they won’t be hands-on with the physical server, unless you require direct administration. This extends to replacing servers.

Your business will also need to set up your server at the data center, as well as the hardware and software add-ons required. Essentially, choosing colocation means transplanting your current IT infrastructure to a different location, where your hosting provider will be responsible for its upkeep. Many provide 24/7 IT support to ensure things run smoothly for your business.

Colocation features

Every colocation provider has its way of doing things, so features tend to vary from one colocation hosting company to the next. Even so, there are features that are relatively common among colocation providers. Some of the features that colocation data centers commonly provide include:

  • Physical security
  • Physical durability
  • Guaranteed reliability
  • Cross connectivity
  • Redundant internet connectivity
  • Redundant power
  • Compliance with various regulations
  • On-site technical support


Pros & Cons

While the benefits of colocation outweigh the downsides, they’re still important considerations when deciding if it’s the right solution for you. Here are some of the pros and cons of outsourcing your data hosting to a colocation center:


  • Cost-effective by allowing businesses to save on initial infrastructure investment
  • Optimal redundancy and reduced downtime
  • Better security by leveraging the provider’s up-to-date protocols in both physical infrastructure and cyber security
  • Designed for high-density cloud computing environments
  • Backed by 24/7/365 remote hands technical support for tactical response
  • Interconnected with an advanced network backbone to serve next-gen computing requirements
  • Scalable to help customers future-proof their business
  • Highly trained and industry-certified techs diagnose, isolate, troubleshoot and resolve issues in a highly controlled manner
  • Facilities meet compliance standards for HIPAA, PCI, HITRUST, SOC 1, SOC 2, SOC 3, etc.
  • Safeguards mission-critical systems and data offsite, making colocation a great choice for disaster recovery and business continuity planning


  • Distance between the data center colocation facility and a customer’s office can translate into increased travel costs when equipment needs to be touched manually.
  • Some colocation providers own and operate multiple colocation facilities all over the country to ensure that distance is not an issue.
  • Uptime is another issue to consider. If a colocation provider does not have access to multiple network carriers or have multiple data centers to ensure a redundant connection 100 percent of the time, then the customer may experience serious outages.
  • Ensure that uptime and recovery are identified in the colocation provider’s SLA, so unexpected outages do not occur.

Why Colocation Matters

Protecting sensitive data is crucial in our tech-driven world. And colocation offers one of the most secure ways to store your data. No matter how large or small your business is currently, you have a responsibility to keep your sensitive data safe. And as your business grows, you can work with your data center provider to determine your network needs and scale your storage space.


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