Colocation vs. Hosting: Which Is Right for Your Business?

As a hosting user, you may be wondering if colocation is the right next step for your growing business. Colocation can provide more control, performance and cost efficiency compared to dedicated server hosting, but it’s not the best fit for everyone. In this article, we’ll dive into exactly what colocation is, explore its pros and cons, and help you determine if it suits your company’s evolving IT infrastructure needs.

What Is Colocation in a Data Center?

Colocation is the practice of housing privately-owned servers and networking equipment in a third-party data center. Instead of keeping your IT hardware in an on-premises server room or leasing everything from a hosting provider, it allows you to own your equipment while renting space in a secure, reliable facility.

In a typical arrangement, the data center provides:

• Physical space (racks, cages or private suites)
• Power, cooling and network connectivity
• Security measures (surveillance, biometric access control, etc.)
• Remote hands support for basic installations and troubleshooting

Meanwhile, you maintain full ownership and control over your colocated servers, storage, switches and software. You’re responsible for configuring, updating and managing the equipment, usually remotely or through “smart hands” service from on-site technicians.

Who Needs a Colocation Facility?

Colocation tends to appeal to established businesses with specific performance, security and scalability requirements, such as:

• Enterprises that have outgrown on-premises data centers. If space, power and cooling limitations are holding back your infrastructure, it offers a cost-effective way to expand capacity without large capital expenses.
• Companies with strict uptime and compliance needs. Compared to an in-house server room, a colocation data center will likely deliver better connectivity, physical security, fire suppression, redundancy and HIPAA/PCI compliance.
• Organizations seeking greater infrastructure control and customization. It allows you to optimize performance by selecting your ideal hardware and software, something not possible with hosting.
• Fast-growing businesses looking to control IT costs. On-prem data centers have high upfront build-out costs, while enterprise-grade hosting can get expensive fast. It offers a more scalable model by letting you own the equipment and rent the facility.

Key Features to Look for in a Colocation Provider

Not all data centers are created equal. To maximize the benefits, look for a provider that offers:

• Carrier neutrality. Having access to multiple telecom carriers helps ensure the best price and performance for your connectivity. Avoid data centers that lock you into one provider.
• Robust security. Your mission-critical data deserves multi-layered protection, including perimeter fencing, 24/7 guards, video surveillance, multi-factor access control, and more. Ask for a tour to assess security measures firsthand.
• High reliability. Insist on a data center with redundant power (2N+1), HVAC (N+1) and network systems for maximum uptime. An SLA guaranteeing at least 99.99% uptime is standard for enterprise-grade colocation.
• Room to grow. Avoid providers that box you into rigid space and power commitments. As your infrastructure expands, having a flexible vendor will make scaling much easier.
• Remote management and support. Retaining control doesn’t mean frequent on-site visits. Top colocation centers will provide a portal for remote monitoring and management, plus 24/7 support and “remote hands” service as needed.

// Example of using the ipmi-sensors utility on Linux to monitor 
// colocated equipment remotely:

# ipmi-sensors -h ipmi_host -u ADMIN -p ADMIN_PASSWORD
+-------------------+------------+--------------------+--------+------------------+
| ID                | Type       | State              | Reading| Units            |
+-------------------+------------+--------------------+--------+------------------+
| IPMI              | Management | Nominal            |      OK|                  |  
+-------------------+------------+--------------------+--------+------------------+
| CPU1 Temp         | Temperature| Nominal            |      45| (+/- 0.5) degrees C  |
+-------------------+------------+--------------------+--------+------------------+
| CPU2 Temp         | Temperature| Nominal            |      42| (+/- 0.5) degrees C  |
+-------------------+------------+--------------------+--------+------------------+
| System Temp       | Temperature| Nominal            |      36| (+/- 0.5) degrees C  |
+-------------------+------------+--------------------+--------+------------------+

Advantages of Colocation vs. Hosting

For the right organization, it can deliver several key benefits compared to traditional hosting:

• More control over your hardware and software stack. It lets you optimize performance by selecting best-of-breed components ideal for your specific applications and requirements. With hosting, you’re generally limited to your vendor’s stock hardware configs.
• Enhanced security and compliance. By colocating in a state-of-the-art data center, you can tap into military-grade security and compliance certifications that would cost a fortune to implement on your own. Top colocation providers even offer compliant infrastructure for HIPAA, PCI-DSS, FISMA and beyond.
• Improved reliability and performance. The best data centers are engineered for 99.999% uptime, with redundant power, cooling and connectivity. Many also leverage advanced technologies like 2N redundancy, computational fluid dynamics and ultrasonic humidification. This robust infrastructure translates into maximum reliability and performance for your mission-critical apps.
• Capacity to scale quickly and cost-effectively. A successful product launch or seasonal spike in traffic can overwhelm an in-house data center. It makes it easy to scale for growth by leveraging your provider’s space, power and cooling capacity. Most charge on a monthly per-rack or per-kW basis, keeping costs predictable.

Potential Drawbacks of Colocation to Consider

While colocation offers major advantages, it’s not the best fit for every workload or business. Some potential disadvantages include:

• Higher costs than basic web hosting. Although it is cheaper than building your own data center, it still involves substantial costs for equipment, connectivity, remote hands support, and more. If you just need simple web hosting, a virtual private server or cloud hosting will be more cost-effective.
• Requires in-house technical expertise. Since you own and manage the colocated equipment, you need a knowledgeable IT team to configure and administer it. Fully-managed hosting offloads those responsibilities to your provider, making it a better choice for firms with limited IT staff.
• Less convenient than an integrated hosting solution. It is a lower-level infrastructure choice that leaves a lot in your hands. You have to procure the hardware, set everything up, and handle all the patching and maintenance yourself. For maximum convenience, a turnkey managed hosting solution or cloud hosting may work better.
• Beware of hidden fees and surprise charges. Some providers tack on extras like higher power rates, bandwidth overages, “smart hands” fees, cross-connect charges, and more. Always read your SLA closely and clarify any gray areas before signing to avoid unexpected costs.

Colocation or Hosting: Key Factors to Consider

Deciding between colocation and hosting ultimately depends on your organization’s unique needs and priorities. Check more article about server hosting. Here are the most important factors to weigh:

As a savvy hosting user, colocation is worth considering if you need more control, performance and room to expand than typical shared hosting allows. Just be sure to choose a reputable colocation partner and clarify all costs upfront. With the right strategy, you can maximize your infrastructure’s potential while keeping expenses in check.