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Colocation For Small Businesses: Is it Practical?

Colocation For Small Businesses: Is it Practical?

Colocation offers the scalability and flexibility of the cloud together with the control and cost-effectiveness of in-house processing. It is therefore an excellent option for businesses of all sizes, particularly small ones. Here is a quick guide to how using colocation can benefit SMBs.


Here are five of the main reasons why colocation is a practical and affordable solution for small businesses.

Minimal capital expenditure

The fact that colocation has minimal upfront costs is a huge selling point for many SMBs. Few small businesses can easily absorb major capital expenses. Moreover, even those that can would probably rather leverage their cash to progress their strategic objectives.

Efficient resource utilization for optimal cost-efficiency

For SMBs, using colocation is likely to work out more cost-effectively overall than using either an in-house data center or the public cloud. The reason colocation is more cost-effective than an in-house data center is that it is more scalable. The reason colocation is more cost-effective than the public cloud is that you pay for resources rather than traffic.

To explain this last point more clearly, public clouds charge according to the amount of data they process. With colocation, by contrast, businesses pay for the resources to process data not for data processing. This means that the more data businesses need to process, the more cost-effective it is to use colocation rather than the public cloud.

Shared infrastructure for reduced operational costs

With colocation, infrastructure costs are shared between all the businesses in the colocation facility. Although the costs are proportional to their usage of the facility, they still tend to be lower than they would be in an equivalent in-house data center. This is because colocation facilities essentially pool each client’s individual buying power. They can therefore often access beneficial prices that would not be available to any individual client.

Geographical diversity for better service delivery

By strategically distributing data centers across different locations, providers can ensure reliable and efficient access to resources. This geographical spread reduces latency, improving the speed and responsiveness of critical applications.

Additionally, it enables businesses to implement robust disaster recovery and business continuity plans by having redundant systems in separate geographic areas. Small enterprises benefit from this approach as it enhances the overall reliability and resilience of their operations.

High reliability for critical operations

Colocation providers offer robust infrastructure with redundant power, cooling systems, and network connections, minimizing the risk of downtime. This reliability ensures uninterrupted access to essential applications and data, fostering business continuity.

Moreover, colocation services leverage advanced monitoring and maintenance systems to identify and address potential issues proactively. This enhances overall system reliability even further. Reliability is a key issue for SMBs as unplanned downtime can lead to significant unexpected costs.

Tailored services

Here are five of the main ways that colocation vendors tailor their service to meet the unique needs of small businesses.

Flexible and scalable pricing models

In business, how you pay for something can be as important as what you pay for it. This is particularly true of small businesses which often have very constrained budgets. Colocation vendors understand this and create pricing models designed for the needs of SMBs. In particular, they will emphasize flexibility and scalability to ensure costs remain affordable.

Customized service packages

The more closely a service package can be aligned with a business’ needs, the better value it will deliver. This is why colocation vendors typically offer both a selection of default service packages and the opportunity to create fully customized service packages. Both options make it easier for businesses to focus their resources where it matters most to them.

Modular infrastructure solutions

Modular infrastructure solutions make it easier for businesses to scale their use of resources in line with their changing needs. The more granularity the colocation vendor supports, the more precisely the businesses can right-size their provisioning. Modular infrastructure is, therefore, key to providing the flexibility small businesses need.

On-site technical support

Most SMBs have very constrained resources, both financial and human. It’s therefore particularly important for them to be able to focus on their core business as much as possible.

Using colocation managed services means that businesses can use their colocation vendor to manage the IT equipment they host in the facility. This often saves them money as well as time and inconvenience.

Compliance support

For many years, compliance has been largely an industry-specific issue. Moreover, it mainly impacted sectors that were already heavily regulated. Now, however, increasing numbers of local authorities have mandatory compliance programs for any business that handles their residents’ data. This means that compliance has become a concern for all businesses and support with it is often a key benefit of using colocation.

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