What are the pros and cons of colocation hosting?

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Server colocation can be an attractive option for companies that are looking for a more efficient way to operate their data center. However, not all companies are good candidates for colocation hosting, so it’s important to consider the pros and cons involved with server colocation before making a decision.


  • Economy of scale
  • Lower risk of network outages
  • Choice of hardware and software

Economy of scale

By colocating their servers in a common environment, smaller organizations that lack the resources to invest heavily in their own in-house data centers are able to share costs with other colocation customers. This allows them to take advantage of higher bandwidth at a lower cost and to have access to specialist staff members that they wouldn’t be able to afford acting alone.

Lower risk of network outages

Colocation hosting can offer network uptime rates as high as 99.999 percent. This near-constant network uptime is due to redundant systems offered by colocation hosting centers, which allow networks to stay up and running, even after system failures. Colocation hosting providers also use virtualization to give customers recent system snapshots that can help them recover from system failures. Many colocation hosting providers also offer 24/7 on-site monitoring, meaning that engineers will always be available to identify potential issues, and inform customers about them immediately.

In addition, colocating servers allows companies to schedule their own planned downtime. Since colocation hosting customers have control over their own hardware, they don’t have to worry about scheduling around the upgrade cycles of a third-party organization, like they would have to if they were customers of a managed data center provider.

Choice of hardware and software

Many companies are hesitant about turning their IT configurations over to a third-party managed data center, because they worry that they won’t be able to choose their own hardware and software. Colocation hosting can be the perfect solution for those companies that don’t have the resources needed to build their own on-site data center, but still want the ability to choose their own hardware and software.

Colocation hosting centers only provide the network infrastructure and physical housing for the data center, meaning that customers are able to provide hardware and software that meet their exact specifications. This gives colocation hosting centers a greater degree of flexibility than managed hosting providers: customers can use server colocation to host almost anything they need hosted, just as they would in their own on-site data center.


  • High upfront costs
  • Greater server management responsibility
  • Hands-on maintenance must be performed at the data center

High upfront costs

Colocation hosting is a good choice for organizations that don’t have the resources to implement their own on-site data centers, but that doesn’t mean there aren’t upfront costs involved with server colocation. Since customers provide their own hardware and software when using colocation hosting, the upfront costs involved can still be high.

Third-party managed hosting providers that offer pre-built hardware configurations may be preferable for organizations that are very cost-sensitive, but the trade-off of the lower cost is a lower degree of autonomy over hardware and software. Organizations must consider this trade-off before determining what data center option would be right for them.

Greater server management responsibility

Since server colocation customers provide their own hardware and deployments, they are responsible for fixing problems with those deployments when they do arise, just as they would be in an on-site data center environment. Companies that don’t have the ability to manage hardware and software issues on site will have an even harder time trying to manage them in a remote data center, making colocation hosting a poor choice for these specific types of customers.

These companies would probably prefer a managed data center, where the data center provider would offer the management capabilities that the company isn’t able to provide itself. However, for companies that are able to provide hardware and software management, but also want to take advantage of the economy of scale offered by a shared server environment, the greater amount of management responsibility required from colocation hosting customers shouldn’t be a deterrent.

Hands-on maintenance must be performed at the data center

Since customers in a server colocation environment are responsible for their own hardware maintenance, they will need to send technical personnel to the data center any time there is a problem that requires hands-on maintenance. This can be very time consuming for technical personnel, and may require a business to select a data center location that is close enough to its office to allow employees to travel back and forth between the data center quickly.

When considering the pros and cons of colocation hosting, the pros outweigh the cons in many cases. The cons demonstrate the fact that server colocation may not be right for every company, since they only apply to certain types of businesses. On the other hand, the pros are more universal in nature: every business could potentially benefit by colocating servers.

Businesses that are looking for the perfect balance between autonomy and shared resources are ideal candidates for colocation hosting. Other companies must look carefully at their individual situations to determine if the benefits offered by server colocation outweigh the potential drawbacks. In most situations, they will.

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