What is Colocation?

If you’re running a business with an online presence, you have a number of options regarding web hosting. If your business is small, with a stable number of visitors, then conventional shared hosting will be fine for you. If you’re a large multinational, you probably have your own web servers. If you’re somewhere in the middle, you may be considering colocation.

Colocation is a hot topic in the web hosting world, so let’s find out more about it.

What is Colocation?

Colocation is when companies house their own, privately-owned, web servers and IT equipment in a third-party data center. The company concerned will rent space in the data center.

The data center, who will be renting out space to many different companies, will provide day-to-day support to keep their clients’ web presence alive. Data centers typically provide bandwidth, power, cooling, security (physical and cyber), and IP addresses.

The client company will be responsible for maintenance and upgrades, although some data centers will offer this service at an extra cost.

Space in colocation data centers is measured in racks and cabinets. A rack is the frame where the physical server equipment is installed, measuring 1.75 inches in height. Forty-seven racks make a cabinet. Space in the data center is usually rented out in full cabinets or half cabinets.

Advantages of Colocation

There are many advantages to choosing colocation over shared or your own hosting.

Firstly, colocation is generally a very reliable way to run your online presence. Power outages are rare, and the data center will have experts on hand to fix them when they do arise. Data centers can keep backups to ensure you don’t lose your data.

Regarding security, data centers will usually be protected by strongly-locked cabinets, CCTV, and human security staff.

Next, you’ll get a better functioning web service than you would through shared hosting. Through colocation, you have access to greater bandwidth. Latency, the time it takes to load your web pages, will be lower.

Importantly, colocation offers flexibility, compared to hosting your own web services. You can choose a plan that suits you, allowing you to upgrade as your business grows. Bandwidth via colocation can often be cheaper than shared hosting on a like-for-like basis.

You also have more control. Although you’re responsible for your own server equipment, it means if you want to upgrade anything, you can. If you don’t want to, you don’t have to.

Finally, colocation is a great way of saving office space. No need for a big rack room anymore. Choosing a maintenance option, if available, can also save IT staff and logistics costs.

Disadvantages of Colocation

Colocation isn’t perfect for everybody, however.

Most colocation data centers are in big cities, such as this one in Seattle. If your office isn’t in a city, you’ll struggle to find a colocation center that you can use. If you still choose the colocation option, you’ll have to travel to the data center to install and maintain your equipment. You’ll only have access during office hours. It can be a waste of time and resources.

You’re also tied to your data center for the period of your lease. If you move cities, this could cause a problem.

Finally, while bandwidth is often cheaper through colocation compared to shared or VPS hosting, with colocation you have to buy all the hardware yourself, which will add extra cost. Depending on your plan, you may have to pay extra as your business grows and your web traffic increases.

Who is Colocation Right For?

If you’re just running a personal website or blog, colocation is probably overkill. If you’re running a large business, then you will probably want to own and run your own web services.

However, if you’re a small business, in the middle of those 2 stages, you will feel the benefits of colocation. You can have a large, professional-looking web presence, while the data center takes care of the hard parts, the day-to-day running.

Where Can You Find Colocation?

You can search ‘colocation’, and you’ll be confronted by hundreds of companies offering colocation solutions, but how do you know what’s right for you?

Here are the top 3 colocation providers currently in the market, according to 451 Research.

1 – Equinix

Equinix is the runaway worldwide leader in the colocation market, with a 9.5% market share and an annual revenue of $3.6 billion. Equinix serves 21 countries across the world and counts among its customers, Amazon Web Services, Salesforce, and eBay.

2 – Digital Realty

Number 2 in the market is Digital Realty, with a 5.7% market share and an annual revenue of $2.1 billion. They primarily serve the US, although they have also a presence across Europe, SE Asia, and Australasia. Digital Realty prides themselves on reliability.

3 – China Telecom

Owned by the Chinese state and primarily operating in China, China Telecom does, however, offer colocation service in North America and Europe. They have a 3.3% worldwide market share.

So, we’ve seen that there are pros and cons to colocation. However, if your business is at the right stage of growth, it can be tailor-made, and there are many big businesses that will be happy to help you.

What are your thoughts on colocation? Do you use colocation for your business? Leave us a comment to let us know.

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