What is Colocation Data Center? A Beginner's Guide 2024

Colocation" is a term you probably use if you work in web hosting. Many IT companies use this service to set up computing resources. Therefore, we have produced this guide explaining "What is colocation?" Colocation is the rental of data center space for your equipment. It indicates that a third-party data center is available to provide you with server rack space along with all necessary equipment, such as a cooling system and power supply.  

Traditional data centers have limited functioning and inadequate ventilation. Independent cooling and power backup systems are standard in modern data centers. To prevent computer overheating, most modern data centers also have unique cool intakes and a suitable exhaust system.

Colocation and colocation hosting are broad topics. This article will clarify several aspects for you, such as "what is colocation service" and "how colocation works," so you can see how colocation can benefit your company.

What is Colocation Hosting?

Colocation, often known as colocation hosting, is the term for an extremely secure data center where businesses can purchase servers, gear, space, and bandwidth. Businesses can purchase server space at colocation data centers and take advantage of enhanced security and uptime guarantees. The majority of organizations store their essential equipment in colocation facilities because they are not in the business of owning and operating data centers. 

How Does Server Colocation Hosting Work?

  • Colocation hosting facilities offer complete server space, physical infrastructure, and security to their business clients. Customers are given the space to set up their servers in a reserved cage, rack, space, or another.

  • Reputable colocation server hosting businesses use a pay-per-kWh business model. It helps companies optimize the power infrastructure of a data center at a lower initial cost. Companies save money under this approach since they only pay for the resources they use.

  • Every company moving to a colocation center needs to confirm that there is adequate power equipment, IP addresses, uplink ports, and server rack space. It is best to review their evaluations and suggestions to find out more about the service provider and confirm which trustworthy option they offer. 

    What Are the Types of Colocation Data Centre Facilities?

    Colocation data center facilities come in various types, each catering to different needs and scales of operations. Here are the main types.

    • Retail Colocation

    This facility offers space in small units such as racks or cages. It is ideal for small to medium-sized businesses that need a limited amount of space and prefer the data center to handle infrastructure management and maintenance.

    • Wholesale Colocation

    This facility type provides larger spaces, typically entire suites, rooms, or floors. It is suitable for large enterprises or organizations with substantial IT infrastructure requirements, offering more control over the space and sometimes infrastructure.

    • Carrier Hotel

    A facility that provides interconnection points for multiple telecommunications carriers and other network providers. It serves as a major hub for data exchange and connectivity.

    • Managed Colocation

    In addition to providing space and power, managed colocation facilities offer various managed services, such as monitoring, security, and maintenance of hardware and networks.

    • Enterprise Colocation

    Specifically designed for large enterprises, these facilities provide customizable space and higher levels of control and security to meet the unique requirements of enterprise clients.

    • Cloud Provider Colocation

    These data centers are optimized for cloud service providers, offering scalable infrastructure and connectivity to support cloud operations.

    • Hyperscale Colocation

    Tailored for hyperscale clients, such as major tech companies with massive data needs, these facilities provide extensive space, power, and cooling infrastructure to support large-scale deployments.

    What Are the Features of Co-location Server Hosting?

    A data center must-have features like high uptime and physical and virtual security. However, a colocation provider's full-service package also includes the following features. 

    • Space Rental

    Colocation hosting allows you to rent out a data center where your server hardware is physically kept. Depending on your needs, this area could be as big as a dedicated room or as tiny as a single rack unit. The amount of space you'll require for your current setup as well as your future expansion goals is entirely up to you. 

    • Power Supply

    Colocation facilities ensure your servers run constantly by providing a redundant and robust power supply. They have backup generators and uninterruptible power supply (UPS) systems installed to handle power fluctuations and outages. You may also monitor and control how much electricity you consume to optimize efficiency and reduce costs. 

    • Cooling and Environmental Controls

    Modern cooling solutions are used by colocation data centers to maintain the proper humidity and temperature for your equipment. They employ both hot/cold aisle confinement techniques and HVAC (Heating, Ventilation, and Air Conditioning) equipment to successfully manage heat dispersion. Continuous environmental monitoring ensures that your equipment runs in a stable and secure environment. 

    • High-Speed Internet Connectivity

    Access to redundant, fast internet connections is made possible via colocation hosting. To provide dependable and low-latency connectivity, data centers feature a variety of network pathways and internet service providers (ISPs). For companies whose applications and services demand quick and reliable network performance, this strong internet infrastructure is essential. 

    • Physical Security

    Colocation hosting places a high premium on security, and data centers employ several physical protection levels. These consist of restricted entrance points, security guards, surveillance cameras, and biometric access restrictions. Your vital infrastructure may rest easy knowing that your gear is shielded from physical threats, theft, and unauthorized access.

    • Scalability

    Scalability choices are provided by colocation hosting to meet your changing business requirements. As your needs increase, you can simply scale up by renting more space or changing your hardware configurations. Because of this flexibility, you can match your infrastructure to your business objectives without being constrained by the needs of developing and operating a data center.

    • Remote Hands Support

    Numerous colocation companies provide remote hand support, which includes technical help for standard chores and troubleshooting. On your behalf, their on-site team may handle emergency response procedures, maintenance, and hardware installations. This service leverages the experience of data center specialists to save you time and money.

    • Compliance and Certifications

    When it comes to data security and regulatory compliance, colocation data centers frequently follow industry standards and certifications. Based on the needs of the industry, they might adhere to standards like SSAE 16, SOC 1/2, ISO 27001, HIPAA, or PCI-DSS. Selecting a licensed colocation provider guarantees that the security and compliance requirements for your infrastructure are met. 

    What Are the Advantages and Disadvantages of Colo?

    Advantages of Colo Server Hosting

    • Cost Savings on Infrastructure

    Businesses that use colocation can split the expense of physical security, cooling, and electricity with other tenants. Because of the considerable cost savings involved in running an internal data center, many businesses find it to be a financially feasible choice. 

    • Improved Reliability and Uptime

    Redundancy is a key design element of colocation facilities, which include multiple power sources, backup generators, and sophisticated cooling systems. As a result, corporate activities will have greater continuity than with conventional in-house installations, which guarantees lower reliability and uptime. 

    • Scalability and Flexibility

    With colocation, you can easily grow your business by adding more servers or modernizing your current equipment without having to make large capital investments. Businesses that experience seasonal swings in demand or quick growth must prioritize this scalability. 

    • Enhanced Security

    Strong physical and cyber security measures, such as access controls, fire suppression systems, and monitoring, are used by colocation data centers. Compared to on-premises data centers, these facilities are usually more secure, shielding infrastructure and sensitive data from several dangers.   

    • Access to Expertise

    Colocation firms provide knowledgeable assistance and upkeep for the infrastructure of the facility by staffing it with skilled IT specialists. Consequently, businesses can take advantage of these people's knowledge and experience without having to hire specialized employees.  

    • Superior Connectivity Options

    Colocation facilities frequently make access to numerous high-speed internet service providers and network carriers possible. This expands connectivity possibilities and guarantees high-speed, low-latency connections for organizations that depend on reliable, rapid internet access.   

    • Environmental Control

    Advanced environmental control systems, such as precise cooling and humidity management, are installed in colocation data centers. These solutions lessen the possibility of hardware failures brought on by overheating or other environmental problems, which helps to maintain ideal conditions for server longevity and performance.   

    Disadvantages of  Colo Server Hosting

    • Initial Setup Costs

    While purchasing server equipment and relocating it to the colocation facility may have considerable upfront setup costs, colocation can yield long-term financial benefits. These upfront expenses could be too much for new or smaller businesses to bear.  

    • Limited Physical Access

    Colocated servers are located in faraway locations, limiting physical access, in contrast to on-premises data centers. Because of this, companies may find it difficult to carry out in-person maintenance, updates, or troubleshooting without arranging visits or depending on remote hand services. 

    • Dependence on Third-Party Providers

    Colocation is the practice of depending on other vendors for infrastructure and necessary services. Any issues with the supplier, such as poor customer support, security lapses, or service disruptions, could have an impact on the business's operations and even cause downtime or data loss.  

    • Long-Term Contracts

    Colocation agreements can have long-term contracts, which could be restrictive if a business's needs alter. These contracts may impose restrictions on flexibility and compel businesses to accept terms and conditions that might not be suitable for their evolving needs.  

    • Potential Hidden Costs

    Even though colocation can be affordable, there might be unstated costs for supplementary services like phone support from a distance, overages in bandwidth, or excessive power use. Businesses must carefully analyze their colocation agreements because these expenses can mount up and possibly cancel out some of the savings.

    • Geographical Constraints

    The colocation facility's physical location may present difficulties, particularly if it is remote from the company's main business operations. The staff's need to visit the facility may result in longer trip times and higher travel expenses due to this distance, which may also make hardware transportation logistics more difficult. 

    • Potential for Resource Contention

    Tenants may fight over the same physical and network resources in a shared setting, a situation known as resource contention. Even though colocation providers monitor these resources to guarantee equitable distribution, there may be situations in which a tenant's high utilization negatively impacts other tenants' performance. 

    Colo Space: What is a Rack, Cage, Cabinet, and Private Suite?

    • Rack

    In colocation facilities, a rack is a necessary component that is used to contain and arrange servers, switches, routers, and other IT equipment. Every rack is a vertical structure that is usually 19 inches wide and ranges in height from 42U to 48U. Clients can rent individual rack units or entire racks, depending on their needs. The rack structure facilitates improved airflow and cooling, which is essential for maintaining optimal equipment performance and longevity. Moreover, racks support standardized mounting hardware, making it easier to install and replace devices without extensive modifications.

    • Cage

    A cage offers a more secure environment within a colocation facility by sectioning off an area with mesh or solid walls, providing physical barriers to unauthorized access. Cages are designed for clients who need a higher level of security than what a standard rack offers but do not require the isolation of a private suite. Typically, cages house multiple racks and can be customized with enhanced security measures such as biometric access controls, surveillance cameras, and additional environmental monitoring. This setup allows companies to meet specific compliance requirements and ensures that their critical infrastructure remains protected.

    • Cabinet

    A cabinet, such as a server cabinet or rack enclosure, is a compact yet essential unit designed to house servers and networking equipment securely. With its standardized height of around 42U, it ensures efficient use of space in data centers or server rooms. Cabinets are equipped with features like locking doors to restrict access, cooling mechanisms to maintain optimal temperature and cable management solutions for organizations. These attributes collectively contribute to creating a controlled and protected environment for critical and sensitive hardware.

    • Private Suite

    A private suite in a colocation facility represents the pinnacle of customization and security. These completely enclosed areas give total control over the environment and are customized to meet the unique needs of a particular client. For businesses like financial institutions and healthcare providers that have strict compliance and regulatory requirements, private rooms are perfect. By offering specialized cooling, power, and network resources, they remove the possibility that the actions of other clients could cause interference. Furthermore, private suites can be built to accommodate specialized infrastructure, including high-density computing and unique cooling solutions, ensuring the highest performance and reliability.

    Security and Customization of Rack, Cage, Cabinet, and Private Suite

    Each colocation option rack, cage, and private suite offers varying levels of security and customization to meet different business needs. Racks provide a cost-effective solution with shared infrastructure, suitable for smaller enterprises or those with less stringent security requirements. Cages add a layer of physical security and are ideal for businesses needing to safeguard sensitive data while still benefiting from shared resources. Private suites offer maximum security and customization, making them suitable for enterprises requiring dedicated infrastructure and high levels of control. These options allow businesses to scale their IT environments according to their growth and evolving security needs.

    Cost Considerations of Rack, Cage, Cabinet, and Private Suite

    The cost associated with each colocation option varies significantly based on the level of security, customization, and space required. Renting individual rack units is typically the most economical choice, with costs determined by the number of units, power consumption, and additional services like remote hand support. Cages are more expensive, reflecting the increased security and space customization they offer. Because they are the most exclusive, have the most customization possibilities, and require a lot of resources, private suites are the most expensive. For companies with essential infrastructure requirements, however, the cost of a private suite can be justified because it guarantees industry compliance and business continuity. 

    What Are Data Centre Tiers?

    A classification system known as "data center tiers" is used to characterize the availability, performance, and reliability of data centers. The Uptime Institute created these tiers to assist businesses in selecting the best data center architecture for their unique needs and specifications. The four stages represent different levels of fault tolerance, redundancy, and cooling. 

    Tier I: Basic Capacity

    Tier I data centers offer the most basic level of infrastructure. They have a single path for power and cooling, without any redundant components. As such, they are susceptible to unplanned as well as planned disturbances. The average availability of Tier I data centers is 99.671% or around 28.8 hours of annual downtime.

    Tier II: Redundant Capacity Components

    Tier II data centers are superior to Tier I since they contain some redundancy. Their redundant cooling and power components reduce the likelihood of outages caused by individual elements failing. They still use a single path for the distribution of power and cooling even with these improvements. The availability of Tier II data centers is roughly 99.741%, or about 22 hours of downtime each year. 

    Tier III: Concurrently Maintainable

    The design of Tier III data centers includes characteristics that increase dependability and uptime. There are multiple power and cooling distribution lines, but only one is ever used at a time, allowing repairs to be made on a single path without having to stop work. This concurrent maintainability ensures better availability, typically 99.982%, with only 1.6 hours of downtime per year.

    Tier IV: Fault Tolerance

    Tier IV data centers offer the highest level of fault tolerance. They have fully redundant power, cooling, and other systems, as well as many active distribution paths. This guarantees that, in the event of a failure, operations will continue. Tier IV data centers are perfect for mission-critical applications because they offer 99.995% availability or fewer than 26.3 minutes of disruption per year.  

    Co-location Trends and Future Developments

    Co-location, or the practice of keeping IT infrastructure in separate data centers, has become more and more common. This progress is being driven by the need for enhanced connection, security, and scalability. By utilizing co-location, businesses may save money on capital expenses and gain access to state-of-the-art facilities without having to worry about maintaining their data centers.  

    • Growth in Demand for Edge Computing

    A significant development influencing co-location is edge computing, which handles data processing nearer to the source. Due to the need for real-time processing and minimal latency, edge data centers are becoming more and more prevalent. Co-location facilities are proactively expanding to support edge computing and bring services closer to customers and Internet of Things devices.  

    • Shift Towards Hybrid Cloud Solutions

    Many businesses employ hybrid cloud strategies, which blend public and private cloud infrastructures. Co-location facilities are crucial to this transition because they offer dependable, secure connectivity between on-premises equipment and cloud services. This hybrid technique offers flexibility, improved performance, and superior disaster recovery capabilities.  

    • Focus on Sustainability and Energy Efficiency

    When selecting co-location services, environmental sustainability is becoming more and more crucial. Data centers are investing in renewable energy sources, state-of-the-art cooling techniques, and energy-efficient technologies. This focus not only reduces operational costs but also meets the growing demand from clients for environmentally friendly IT procedures.  

    • Enhanced Security Measures

    Co-location providers continue to place a high priority on security despite the rise in cyber threats. Advanced security measures like multi-factor authentication, biometric access controls, and AI-driven threat detection are being implemented in modern facilities. These steps guarantee both adherence to strict laws and data integrity. 

    • Integration of AI and Automation

    Automation and artificial intelligence are changing the co-location scene. AI-powered management solutions increase overall efficiency, forecast maintenance requirements, and allocate resources optimally. Automation lowers operating expenses and human error, giving customers a more dependable service. 

    • Expansion into Emerging Markets

    Co-location services are growing in emerging countries to take advantage of the increasing levels of digitization and internet penetration. Investments in data centers are rising in areas including Africa, Latin America, and Asia-Pacific. This growth brings in foreign companies searching for fresh prospects while also assisting regional companies. 

    • Future Developments in Co-location

    Co-location will probably experience increased integration in the future with cutting-edge technologies like 5G, blockchain, and quantum computing. These advancements will improve overall service quality, security, and data processing speeds. To satisfy the needs of contemporary applications, there will also be a continuous push towards ultra-low latency and localized data centers. 

    What Should I Consider When Choosing the Best Colocation Services Provider?

    Businesses can delegate the operation of their IT infrastructure to a reliable, secure place by utilizing colocation. Significant cost reductions, increased resilience, and a stronger emphasis on core company activities could result from this. However, not every colocation provider is made equal. Making the most of this powerful solution requires careful partner selection. These are the most important things to consider while looking for the best fit for the needs of your business. 

    • Geographic Proximity and Accessibility

    The data center's location should be taken into account while selecting a colocation service provider. Being close to your place of work can lower latency and improve physical access. Consider how simple it is for your IT personnel to reach the facility, as well as whether the provider provides round-the-clock access. 

    • Comprehensive Security Protocols

    Selecting a colocation provider necessitates giving security considerable thought. Examine the physical security measures, including biometric access controls, surveillance cameras, and on-site security guards. Find more about industry standards for intrusion detection systems, firewalls, ISO 27001 compliance, and other cybersecurity measures. 

    • Guaranteed Reliability and Uptime

    Business continuity depends on the data center's dependability. Look for suppliers who give robust uptime guarantees, often 99.99% or above, along with Service Level Agreements (SLAs). Check the provider's past for events like power outages, cooling downs, and other issues that can interrupt service.  

    1. Expansion Capabilities and Flexibility

    Your colocation provider should offer scalable options to facilitate your future growth. Check to see if the supplier can satisfy your expansion goals by offering you additional power, space, and connectivity options. Flexible contract periods can also be helpful if the needs of your business change over time. 

    • Robust Network Infrastructure

    A robust network infrastructure is necessary for optimal outcomes. Verify that the provider has multiple high-speed connections, peering arrangements, and redundancy to minimize downtime. Check the connectivity to the major internet exchange points and the availability of the providers.

    • Round-the-clock support and Maintenance

    Take into account the caliber of the maintenance and support services offered. Seek for companies that have knowledgeable employees who can address problems fast and who provide 24/7 technological assistance. Recognize the repair schedules and protocols to make sure they minimize delays and match your operational needs. 

    • Adherence to Compliance Standards

    Check to see if the colocation supplier conforms with legal and industry-specific regulations. Certifications from SOC 1, SOC 2, PCI DSS, and HIPAA, among others, demonstrate the supplier's commitment to following stringent policies for data security and protection. Compliance is crucial for businesses that operate in regulated industries.  

    • Cost Efficiency and Value Proposition

    Examine the colocation services' cost structure, taking into account setup, ongoing, and any additional expenses for services like cross-connects or remote assistance. To be sure you're getting the most return on your investment, weigh these expenses against the value offered in terms of infrastructure quality, support, and dependability. 

    • Effective Environmental Management

    Enough environmental controls are necessary for your equipment to be stable. Make sure the data center has state-of-the-art fire suppression, humidity control, and cooling equipment to provide optimal operating conditions. With efficient environmental control, hardware lifespan is extended and equipment failures are decreased.

    • Industry Reputation and Client Reviews

    Evaluate the provider's standing within the sector. To determine whether previous or current customers were satisfied with the services, look for reviews and testimonials. A supplier who has received great reviews and has a solid track record is more likely to provide a dependable, high-caliber service.

    Read More: Advantages of Local Colocation Data Center for Your Business


    Our Thoughts 

    Colocation facilities offer a scalable and secure alternative for businesses of all sizes within the dynamic digital ecosystem. By using colocation services, you may obtain state-of-the-art technology, enhanced security measures, and competent technical assistance at a fair price. Colocation offers a reliable and flexible solution for your data center needs, regardless of whether you're a startup entering the cloud or an established business trying to optimize your IT operations. To give cutting-edge solutions that guarantee your company can stay ahead of the curve for as long as technology advances, colocation providers are continuously inventing. With colocation, you can concentrate on your main business goals and let the professionals handle the administration of your data center. A complete solution is provided by colocation.


    Who Uses Colocation Services?

    Businesses that need a great degree of control over their hardware and infrastructure usually use colocation services. These can include big businesses, IT firms, and institutions with high data requirements. 

    How Does a colocation Hosting Server Differ from Traditional Web Hosting 

    Colocation gives businesses complete control over the hardware and its configuration, in contrast to typical hosting services, which put their servers in the infrastructure of the service provider. Consequently, businesses can customize their servers to fulfill their unique needs and ensure the protection of their information.

    How Much Does Colo Server Hosting Cost?

    Every one of the aforementioned components has related expenses. Rack space is typically rented by data centers for between $100 and $300 per U each month. This monthly charge usually includes an allotted amount of IP addresses and bandwidth.

    What is the Difference Between Co-location Hosting and Dedicated Hosting?

    The differences between dedicated servers and colocation are easily summarized. With colocation, your servers are housed in a third-party data center, which provides a more secure and regulated infrastructure; but, with dedicated servers, you have the option to lease or buy the entire server.

    What is the Difference Between Colocation Centre and Cloud Hosting?

    The main difference between colocation and the cloud is how data is managed and stored. In the cloud, servers are owned by the cloud provider and data is managed virtually. In a colocation arrangement, the firm renting the space is the owner of the servers, not the colocation facility.

    Is Colo Right for My Business?

    Data centers and colocation offer expanding businesses several scalable and affordable advantages. When contemplating a data center, search for four essential elements that might facilitate your company's growth, both now and in the future, such as Disaster/Emergency Recovery; Compliance and Maintenance; Security; Business Scaling

    What Questions Should I Ask a Colocation Provider?

    Learn about the company's support services, compliance certifications, scalability choices, and uptime guarantees. Find more about their pricing policies, network connectivity, and security procedures to ensure they meet your specific needs. 

    How Much Space Do I Need for My Colocation Needs?

    A full-scale data center typically occupies 100,000 square feet and is home to 100,000 servers, or very powerful computers. Many times, servers are kept on racks, which function as a cabinet for several servers.

    What Security Features Do Colocation Providers Offer?

    Colocation companies frequently include robust physical security features including biometric access controls, secure entrance points, and round-the-clock surveillance. As additional cybersecurity defenses, they provide DDoS mitigation, firewalls, and data encryption services. Your data and equipment are protected from both physical and digital dangers by these protections. 

    What is the Power and Cooling Infrastructure at a Co-located Data Centre?

    The redundant cooling systems that colocation data centers provide are equipped with components that guarantee proper airflow and temperature maintenance.

    Can Colocation Hosting Support Disaster Recovery?

    Colocation data centers, which provide dependable, secure, and redundant infrastructure to store an organization's mission-critical systems, data, and IT, help with disaster recovery and business continuity.

    Why is Power Redundancy Important in Colocation?

    Power outages can have a major effect on the availability and performance of mission-critical IT systems. Power redundancy must be implemented in a colocation hosting environment to maintain peak performance and continuous power availability.

    What Are the Environmental Controls in Colo Data Centers?

    Data center environmental monitoring is the process of obtaining and examining data on a data center's outside characteristics. Temperature, humidity, electricity consumption, and ventilation are some of these environmental variables. Metrics collected throughout the monitoring process are used to determine whether the data center is operating under appropriate conditions.

    Colocation FAQs

    About Server Colocation UK

    Our servers are located in our own data center which is located in Derby, United Kingdom.
    The data center is fully owned and managed by Data center plus, giving us the flexibility to work with our customers requirements and provide unrivaled levels of support.

    Our data center is located next to Mansfield Road, Derby, UK. We are very accessible.
    Our address is: Suite 18, Parker House, Mansfield Road, Derby, DE21 4SZ

    Tour of our data center facilities is reserved for customers who are looking for colocation services with Data center plus.
    If you would like to visit the data center, we must receive at least 24 hours notice.
    You will also require to bring a form of ID in the form of a passport or driving license. We cannot allow anyone into the data center failing these requirements.

    If you would like to place an order please contact us directly.
    You can contact our sales team directly on 0808 169 7866 or emailing info@servercolocation.uk.
    If you are an existing customer, log in to the site and simply check out after selecting your new service and proceed to payment options. The details of your new service will be added to your account portal.
    If you are placing an order that is an upgrade to your existing one, get in touch with your account manager or raise a support ticket at info@servercolocation.uk.


    If you are experiencing issues with your server, we recommend that the first you do is to raise a support ticket with our support team.
    This can be done by sending an email to info@servercolocation.uk.
    Alternatively, if the matter is time sensitive, feel free to give us a call on 0808 169 7866 and select the option for Support.
    We have a 30 minute SLA response time to any ticket raised.

    Remote hands cover requests made within office hours.
    Our Remote Hands service covers assistance with the following items:
    – Server reboots
    – CDROM connect/disconnect
    – Cable checks and moving network cables.
    – Checking/relaying diagnostics information back to the customer.
    If you require services outside of the above (for example, installation of software), we can provide this as part of our Additional Services, which is chargeable. Please contact your account manager or our helpdesk for further information.

    Support for hardware failure is 24/7/365 on our Managed Servers.
    Most failed hardware components can be replaced within 1 hour (during office hours and subject to parts being in stock.
    Office Hours: 08:30 – 18:00

    Emergency support work