The Best Colocation Hosting: Who's The Best For Your Site? [Updated: 2018]

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What You'll Learn

Colocation is a specialized form of hosting that is often used by businesses requiring the highest security available and reliable uptime.

In this article, you'll learn how to determine whether colocation is a good option for your enterprise

We'll look at attractive risk mitigation factors and what you should look for in a colocation host.

I'll also offer my personal recommendations for industry-leading colocation hosting. You may find these recommendations helpful in jumpstarting your search.

what is colocation hosting

What is Colocation Hosting?

Colocation is like mini-storage for servers. Rather than building a data center for themselves, or trying to run servers out of office spaces, companies who need to run their own server equipment can rent server rack space, internet bandwidth, and even equipment from a colocation center.

Colocation is sort of a middle-ground between consuming cloud infrastructure and building a dedicated data center. Any company that has server needs that cannot be met by existing cloud providers is a good candidate for colocation.

The History of Colocation Hosting

When the internet first started, servers were hosted at whatever organizations owned them. This was fine when the internet was limited to universities and research labs, but the growth of the World Wide Web in the '90s meant more servers and fewer organizations familiar with their requirements.

A number of colocation providers sprang up to fill this growing need for a place to reliably host internet servers.

Find The Best Colocation Hosting For You

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LiquidWeb screenshot
LiquidWeb Colocation plan
5TB
  • Support 4.5 stars
  • Features 4.5 stars
  • Uptime 4.5 stars
  • Value 4.5 stars
4.5 stars
62 user reviews
Usual price:
Get % off!
$150.00/mo
(Billed as $150.00 Per Month) Prices in are approximate, based on current exchange rates. The host will likely charge you in USD, or at a different exchange rate.
Visit Host
HostDime screenshot
HostDime Colocation plan
  • Support 4 stars
  • Features 4 stars
  • Uptime 4 stars
  • Value 4 stars
4 stars
39 user reviews
Usual price:
Get % off!
$100.00/mo
(Billed as $100.00 Per Month) Prices in are approximate, based on current exchange rates. The host will likely charge you in USD, or at a different exchange rate.
Visit Host
Sharktech screenshot
Sharktech Colocation 1U plan
3,000GB
  • Support 5 stars
  • Features 5 stars
  • Uptime 5 stars
  • Value 5 stars
5 stars
1 user reviews
Usual price:
Get % off!
$79.00/mo
(Billed as $79.00 Per Month) Prices in are approximate, based on current exchange rates. The host will likely charge you in USD, or at a different exchange rate.
Visit Host

Who Uses Colocation?

With the growth of cloud computing and managed hosting, fewer organizations host their own web servers. Most of the customers for colocation are hosting providers themselves.

They might be ISPs, web hosting providers or cloud computing providers. These customers need maximum control over their servers combined with reliability of a data center.

Tech Industry

Colocation is especially popular with midsize organizations in the IT and internet sector, because it allows them to focus on specific value-added work rather than server logistics. This may include companies in the eCommerce, telecommunications, and industrial services industries.

Cloud Providers

Colocation is also very popular with providers of Cloud infrastructure, who rent space for their servers and then rent out server access to cloud customers.

A lot of colocation facilities double as internet exchange points. Different carriers and ISPs can arrange for connections in "meet-me-rooms" specially designed for interconnecting carriers. It's a win-win situation for the colo providers and ISPs.

They can connect without paying local loop fees, and they get extra redundancy in case their main communication links in other facilities fail.

What are the Benefits of Colocation Hosting?

The cost savings found in the large-scale data centers run by major companies can be realized by small and medium-sized companies that are essentially pooling their data center needs by renting shared facilities.

Additionally, colocation allows companies to quickly scale their server capacity up or down as needed.

Other benefits realized by this pooling of needs and resources include:

  • Cheaper floor space
  • Reliable access to power, battery backup, and generators
  • Experienced data center facility management
  • Disaster recovery resources
  • Extremely fast internet access
  • Very high bandwidth and low network latency
  • Professional security guards
  • Cheaper and more advanced climate control systems
  • Live equipment monitoring

colocation when to use it

Should My Business Use Colocation Hosting?

There are quite a few reasons a company would lease or license colocation space rather than build its own data center.

Cost Savings

One of the main drivers for the use of colocation centers is financial.

Renting is often found to be more expensive than buying in the long run, but it is almost always cheaper on a shorter timescale.

Data Center Design

Another common reason to use colocation is a lack of expertise in data center and building management.

A software development company or a cloud infrastructure provider might possess the knowledge and experience to buy, configure, and run their own servers.

They might even have specific needs that make doing this (rather than consuming cloud services) the right choice.

But they might not have experience with building security, electrical systems, HVAC, and other physical requirements. In this case, colocation hosting may make more sense for them.

What Do I Need to Know About Data Center Security?

Without physical security, anyone can walk into the server room and cause mischief.

Hackers don't have to break into machines over the internet, they can do a lot of damage with physical access to the server.

They might try rebooting a machine into single user mode and resetting the root password, giving them access to your data. They might attach a USB stick to a machine and install malware or copy sensitive data.


This HostDime video tour provides a helpful glimpse of the security measures provided by the company. These include biometric access at all entry points. Also shown is HostDime's Florida colocation center. The company also offers multiple colocation centers in the United States and abroad.

Does Colocation Hosting Offer Better Security?

This is one consideration for using colocation to be security.

Not just the security of your web server's software, but the physical security of the machine itself.

Professional hosting companies employ strict security procedures.

Only authorized people, like system administrators, are even allowed into the machine room at all. They use mechanisms like key cards to prevent unauthorized access to the server room. Random people can't come in and mess with your servers.

Common Security Measures in Colocation Hosting

Colocation buildings tend to be much more secure than standard hosting locations.

This is important for companies who handle secure or sensitive data. They often have physical security, such as guards and video monitoring.

Other building features might include:

  • Fire prevention and fire suppression systems
  • Locked cabinets
  • Cages
  • Server racks, both 19-inch (data) and 23-inch (telecom)
  • Overhead cable trays
  • Advanced climate control, including cooling and humidity management
  • Electrical grounding

Data Center Reliability: Does Colocation Offer Better Uptime?

As well as physical security, using a colocation center can also guarantee more uptime.


This view inside of Liquid Web operations shows security aspects of their datacenter and protocols that support uptime.

Many of these centers have a lot of experience hosting servers. As mentioned earlier, they have the right equipment to deal with the demands of servers running 24/7: power, networking, cooling, and expert technical staff.

Generators for Reliable Power

Most colocation centers have generators in case the data centers lose power, keeping your site up. Some larger colocation hosts have multiple facilities that they can use to spin up backup servers in case something catastrophic happens to the main data center.

Reduce Financial Risks

Colocated server housing can also be used as a risk mitigation strategy.

A number of cost factors in self-hosting have significant variability, including:

  1. The price of electricity and bandwidth
  2. Property taxes
  3. Labor costs
  4. Business equipment insurance

By entering into long-term, fixed-price contracts with colocation service providers, small and medium-sized business can ensure predictable data center expenses, greatly reducing their exposure to financial risk.

What are the Downsides of Colocation Hosting

The biggest downside to colocation hosting is distance. There are times when direct, physical access to server equipment is needed. Depending on the location and volume of work, this can translate into travel costs and no small amount of aggravation.

Not Always Cost-Effective

Moreover, at a certain point, the economies of scale tip back in favor of building your own data center. If a large volume of servers will be needed for an extended or indefinite period of time, it may simply be more cost effective to house servers on company property.

Locked-In Prices Can Be a Drawback

There is also a certain amount of price risk involved. Several commodity pricing factors are included in the price of colocation hosting packages, including the cost of electricity and internet bandwidth.

If these prices go down, you may be stuck paying higher prices because of a long-term contract that locks in rates. (Of course, this rate lock-in can also be a benefit if commodity prices go up, as noted above.)

colocation alternatives

Alternatives to Colocation

Advances in virtualization have created alternatives to hosting physical servers in a colocation facility. VPS or cloud hosting are common alternatives to colocation hosting.

Why would you want to choose these options instead of colocation servers?

Type

Features

Benefits

Virtual Private Server, or VPS.

Offers the advantages of a private server without having to own a physical machine.

More control, lower cost

Cloud hosting

Similar to a VPS but the network and bandwidth capabilities of your servers are elastic.

Pay what you use and easy to scale up

VPS Hosting Versus Colocation

With a VPS, you get a virtual machine that lives on a physical server with other customers' virtual machines. You get control over the actual software without the overhead of a rack-mounted machine to install. Your hosting company takes care of the details while you concentrate on keeping your site up.

Cloud Hosting Versus Colocation

With cloud hosting, you only pay for the capability you use. This makes it a possibly cheaper alternative to colocation. It has the same advantages as a VPS. You don't need to buy and maintain your own server. The hosting company takes care of the infrastructure for you.

If you have a low-traffic site, you can get by with smaller drives and bandwidth allowances. If your site gets a sudden burst of popularity, you can ramp up the capabilities to keep up with the demand.

Disadvantages of Cloud Hosting

The disadvantage is that if you're using a public hosting plan, your cloud servers share physical servers with others. For security or performance reasons, you might find this unacceptable.

Private Cloud Hosting

A private cloud with your own servers in a colocation facility gives you more control combined with the ability to spin up more capacity for your cloud servers when you need to.

If you don't absolutely need the control a colocation facility gives you, you might be better off with the other options.

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