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A Simple Guide To Colocation In Silicon Valley

A Simple Guide To Colocation In Silicon Valley

Using colocation offers businesses the combined benefits of both private data centers and the public cloud. It has therefore become a popular solution with businesses that want control and flexibility. Colocation operates in much the same way regardless of location. That said, there are some minor but relevant differences between different areas. With that in mind, here is a simple guide to colocation in Silicon Valley.

An overview of the Silicon Valley business landscape

Literally, Silicon Valley is the Santa Clara Valley area or, more accurately, Santa Clara County and southeastern San Mateo County. Figuratively, the term Silicon Valley is now often used to describe the entire Bay area with its strong focus on tech. It has become so famous that it has given rise to a number of derivatives both in the US (Silicon Slopes in Salt Lake City) and elsewhere (Silicon Glen in Scotland).

Arguably the only real industry in Silicon Valley is the tech industry, although in different variations. There is information technology (IT), artificial intelligence and robotics, biotechnology and life sciences, and clean energy and sustainability.

Of these, probably the most famous and strongest sector is IT. Silicon Valley is home to some of the biggest names in the industry, including Apple, Alphabet (Google), and Meta (Facebook). It is, however, also the biggest start-up hub in the US if not the world.

Silicon Valley hosts a myriad of tech incubators and accelerators, attracts major venture capitalists actively looking for businesses to invest in, and has world-class research and development centers.

The benefits of colocation in Silicon Valley

Here is a quick overview of the five main benefits of colocation in Silicon Valley.

Straightforward access to a strategic location

As network technology has matured, the significance of geography has become increasingly evident. Distance influences both speed and security, both of which are major considerations for modern users.

By hosting data and/or services close to the people who use them, businesses can minimize the delay between request and service. That means they can also minimize the risk of data being intercepted or lost.

Hosting sensitive data near its owner and/or users can also have significant benefits. Firstly, it can make the data easier to protect. Secondly, the fact that it makes the data easier to protect can be a reassuring signal to both customers and (potential) employees.

In fact, it’s increasingly common for businesses (and individuals) to factor data protection into their purchase decisions. This is particularly likely for businesses in the Silicon Valley area since many of them will deal with highly sensitive data.

Short- and long-term cost-effectiveness

The fact that colocation is cost-effective in both the short and long terms is highly relevant to the Silicon Valley area.

Using colocation in Silicon Valley means that businesses save themselves the capital expenditure required to build an in-house data center. They can, however, still benefit from the cost savings of storing and processing data in-house rather than in the public cloud.

Predictable costs

Another benefit of using colocation is that its costs are usually easier to predict, and hence budget for, than the cost of using the public cloud.

Even if you have a committed contract with a public cloud service provider, you are always open to the risk of exceeding your limit. If this happens, the add-on costs can be painful.

With colocation in Silicon Valley, you can usually build in some extra capacity without excessive costs. If you find you need more, you can scale up and/or expand into the public cloud.

Scalability with customizability

Scalability is another major benefit of colocation in general. Where colocation wins out over the public cloud is that it combines scalability with a high level of customizability. This means that businesses using colocation in Silicon Valley have much more granular control over their IT infrastructure than businesses using the public cloud.


A final, major benefit of colocation is its level of convenience. Many businesses see IT infrastructure as, essentially, another utility. Like utilities, they simply want their IT infrastructure to run quietly in the background without them having to make any effort.

Using colocation in Silicon Valley means that the colocation vendor deals with the day-to-day management of the data center. The customer just has to manage their own equipment and user accesses.

Factors influencing the cost of colocation in Silicon Valley

The seven main factors influencing the cost of colocation in Silicon Valley are:

  • Location and physical space requirements
  • Tier level
  • Security and compliance
  • Network connectivity options
  • Power requirements and energy efficiency
  • On-site support and SLAs
  • Contract length and flexibility

Of these, location is generally the most important. In addition to being a major cost in itself, location also influences many other factors, including and especially, network connectivity.

Colocation Silicon Valley

If you are looking for colocation services in Silicon Valley, DataBank is an excellent choice. DataBank has a state-of-the-art data center in Silicon Valley, which offers 13,770 square feet of raised floor space, and 3MW critical IT load. Learn more about DataBank’s Silicon Valley data centers.

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