Colocation is a hosting option that is frequently used by SMEs that need the power and flexibility of a dedicated server, but do not want to have to worry about the costs of acquiring and maintaining all of the associated infrastructure needed to support it. Colocation is similar to renting a dedicated server, except that you own the server and are simply paying the hosting company to house and look after it for you.
Colocation hosting is far cheaper than running your own server once you factor in the cost of a business-grade DSL or cable connection and a secure room with generators, UPS systems and other important infrastructure requirements.
The up-front cost of colocation can be expensive, since you need to purchase the hardware and any proprietary software that you want to run on the server. However, in the long run you should end up saving money because colocation is cheaper than renting a dedicated server. You own the hardware, and you own the software, so if you decide to change hosting provider you can take everything with you, which makes moving fairly easy.
Colocation also offers a good degree of data security. Your server is off-site, so in the event of a break-in, fire or other disaster affecting your premises, the server will be safe. Of course, fires, floods and break-ins can happen at colocation centers, but any good datacenter will have far better security, fire suppression systems and disaster recovery plans than the average SME.
When you use colocation, you can access your server via SSH, remote desktop, or your server’s own control panel software. If you need to perform a physical upgrade, you can visit the datacenter to do so. If you don’t want to deal with site visits and maintaining your own hardware, but do want to enjoy the power of having “your own server”, rending a managed dedicated server is a good compromise.
Colocation hosting involves purchasing a server, and then having the hosting provider keep it in their datacenter. The hosting company shoulders the cost of the dedicated internet connection, the climate controlled server room, backup generators, fire suppression systems and security. You pay a monthly fee and don’t have to worry about the physical health of the server.
Before you spend a lot of money on expensive hardware and a colocation contract, talk to your web developer and find out exactly what your site needs. Colocation hosting is a great option if you want 100% control over your server, but your company does not have its own dedicated server room or an internet connection that is fast and reliable enough to run a server on. If all you want to do is run a couple of small websites or other online services, then colocation may be overkill and a medium-specification VPS might be a better option. However, if you need a powerful system with a highly specific configuration, then buying your own server is the way to go.