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Data center colocation benefits and drawbacks


data-center-colocationIs it the right solution for you?

Data center colocation or server colocation are an interesting option for many organizations. In-house facilities can be expensive, managed facilities may not provide flexibility. However, there are a few key points that need to be considered before choosing data center colocation.

After working with a data center closely for an analytics project, we have listed a few benefits and drawbacks that should be considered for organization planning to set up their data center at a colocation site.


  • Scale of operation
  • Risk management
  • Choice of hardware/software

Scale of operation

Smaller organizations can benefit from data center colocation. Especially, when an organization does not have a lot of resources to invest in data center setup. By colocating their data centers, these organizations can take the benefit of bandwidth, specialist staff, and (comparatively) lower cost.

Risk management

Colocation hosting providers also take care of redundant systems. This, in turn, allows them to offer 99.999% uptime. Many of them also have a 24/7 support that could help the customers in case of any issues. This lowers the risk of (unplanned) downtime and allows organizations to provide continuous service to their customers.

Choice of hardware/software

Managed data center hosting providers has its benefits. However many organizations are not comfortable with the type of hardware and software choices. In data center colocation, the customers can choose their own hardware and software. The colocation service providers usually only provide the physical space and network infrastructure.


  • Responsibility
  • Expense
  • Maintenance


Customers are responsible for their own hardware and deployment. This means when a problem arises in deployment or installation, the responsibility lies on the customers. This makes data center colocation a more difficult proposition than managed data centers.


Data center colocation may be a good choice for smaller organizations but they can be expensive. Maybe not as much as in-house facility but still more than some other available options (IaaS, third party managed DC, shared hosting etc.).


There can be difficulties in terms of maintenance. With data center colocation, the hardware is off premise. As a result, in case of maintenance, the engineers need to travel from the customer location to the DC colocation site. Also the time spent between the travel needs to be considered while choosing a data center.

Overall data center colocation can be a sweet spot. Organizations with moderate resource can leverage their flexibility. At the same time can keep the overall cost under control.

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