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What Is A Colocation Data Center?

What Is A Colocation Data Center?

A colocation data center is similar to a co-working space but for IT equipment. The data center itself is owned and run by a specialist vendor. This vendor rents out space within it to individual companies. These companies use the space to install and run their own IT equipment. If you are interested in using a colocation data center, here is a quick guide to what you need to know.

How does a colocation data center work?

In a typical colocation data center arrangement, the colocation vendor will provide everything related to data center infrastructure. This would include maintaining the entire property (outside and inside). It would also include ensuring the availability of power and network connections.

The client’s responsibility usually starts literally at the boundary to their own space within the colocation data center. For example, the client is likely to be responsible for installing their own data center cage (assuming they wish to use one). Clients are always responsible for installing and running their own equipment.

Value-add colocation data center services

Many colocation data centers offer some level of value-add services. At a basic level, colocation data centers will often provide some element of IT support to their clients. For example, they will often keep keys to data center cages so they can reboot servers.

Many colocation data centers go further than this and offer managed IT services. This can mean anything from taking care of standard IT housekeeping tasks to fully managed hosting. It’s also fairly common for colocation data centers also to function as cloud data centers. This can be very convenient for businesses that want to run hybrid clouds.

The benefits of using a colocation data center

The benefits of using a colocation data center can be summed up as simplicity, convenience, and cost-effectiveness. Here is some more detail about what this means in practice.

Low barrier to entry

For many businesses, even at the enterprise level, this may be the single biggest attraction of using a colocation data center. Building or buying a private data center requires a huge upfront commitment. Building a data center also carries substantial risk if anything goes wrong. With a colocation data center, you just sign a contract and install your equipment.

Guaranteed service

This is another huge benefit of using colocation data centers. When operational issues crop up (as they inevitably will), it is the vendor’s responsibility to deal with them, not the client’s. In fact, operational issues should be (and usually are) resolved without the client even noticing them.

Minimal to no staffing concerns

For most businesses, IT is something they need, not something they do. This means that they generally do not want to deal with the hassle of recruiting and retaining IT staff. What’s more, if they are going to recruit and retain IT staff, they want those staff to add real value. This means enabling them to spend their time on company-specific projects, not general IT.

This reality has been behind the massive growth in managed IT services. Using a colocation data center is, essentially, just an extension of this. Fundamentally, colocation data centers are a form of Infrastructure-as-a-Service (IaaS). They can be (and often are) supplemented by other forms of managed IT.

Ability to scale easily

Scaling in a colocation data center is not quite as easy as scaling in a public cloud. On the other hand, it is a lot easier than scaling a private data center. You simply negotiate a new contract with the vendor and update your implementation as required.

Predictable costs

Colocation data centers bill in much the same way as cloud services. In other words, the vendor and the client agree on a price for the provision of the service. That is all the client pays. If the client’s needs change then the contract is renegotiated to reflect the change.

This means that colocation billing tends to be very predictable. As a result, it is much easier for finance teams to incorporate the cost into their budgets.

Considerations when choosing a data center

The considerations when choosing a colocation data center are much the same as for choosing a private data center. In fact, they are broadly similar to the considerations when choosing a cloud data center. Here are the key points you should keep in mind.


How close does your data center need to be to your user base? Having it nearby reduces the distances data has to travel. Having it further away will increase the chances of it staying operational if there is disruption in your local area.


This does without saying. Any data center has to implement the very highest levels of security (physical and digital).


Does the colocation data center only offer colocation or does it offer other services as well? If it offers other services, what does it offer and what are the terms?

Contract terms

What are your rights and responsibilities under the contract? What are the vendor’s rights and responsibilities? What legal jurisdiction governs the contract?

Pricing structure

Make sure you are clear on what is and is not included as part of your service contract. Also, make sure you understand the implications of making any changes such as scaling up.


Related Resources:

What Is Edge Colocation?

Five Advantages of Colocation for High Performance Computing

What You Should Consider When Looking At Colocation Remote Hands Services

Colocation Amenities

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