Key Points
- Colocation data centers house your servers in secure, off-site facilities, providing shared power, cooling, and networking to improve uptime, reliability, and data protection.
- A colocation data center is a third-party facility where organizations deploy their own hardware while the provider manages power, cooling, physical security, and network infrastructure.
- Colocation lowers IT infrastructure costs by eliminating the need to build and maintain an on-premises data center while offering predictable, stable pricing.
- High-speed connectivity and enterprise-grade security make colocation ideal for performance-driven and regulated workloads that require minimal downtime.
- Colocation and cloud serve different needs—colocation offers control and performance, while cloud provides scalability, with many businesses using a hybrid approach.
- Colocation allows organizations to retain full ownership and lifecycle control of their server hardware, supporting stricter security, compliance, and data governance requirements.
- Choosing the right colocation provider depends on factors such as redundancy, security, connectivity, disaster recovery, and remote management support to ensure long-term reliability.
Colocation data centers enable you to host your IT infrastructure in a managed, secure, and offsite environment — a crucial consideration for organizations seeking to ensure high availability, data security, and resiliency.
This guide explains what colocation data centers are, the key features and benefits of colocation, and their role in modern IT infrastructure management (especially in the cloud era). It also outlines the factors that organizations must consider when choosing a colocation provider to host their critical business infrastructure.
💡 If you’d rather see a visual explanation, watch our video: What Is a Colocation Data Center?
Secure and monitor your colocated assets with a powerful RMM like NinjaOne.
What is a colocation data center?
A colocation data center (or colo for short) provides managed rack space in a pre-existing data center facility for your servers and other IT infrastructure. Your hardware is sent to the facility, where it is installed and connected to their managed infrastructure. This space is shared, so while your equipment may have its own rack or cabinet, its power supply, and often networking and internet, are supplied by the colocation facility (hopefully, with robust network isolation and regular security audits).
Usually, you will have configured your hardware for remote access, and on-site access can be organized. This is often not required, as most tasks that require physical intervention can be provided by an on-site engineer employed by the colocation provider.
Colocation data centers are an alternative to hosting your servers and data on-site in your own premises or in cloud environments where you don’t own (or have any control over) the underlying server hardware.
Benefits of using a colocation data center for your IT infrastructure
Cost-efficiency
The most significant advantage of colocation over other data center solutions is cost: maintaining your own high-availability IT infrastructure is expensive, involving redundant power, networking, and internet, as well as HVAC, and a 24/7 engineer on hand to quickly resolve issues. Operating IT infrastructure is far more efficient at scale, so colocation service providers can provide resilient managed infrastructure at a fraction of the cost of building and hosting it yourself.
Fast internet speed
Colocation also gives you access to high speed internet connections, compared to what you might be able to get installed in your office. This combination of managed services results in reduced downtime and improved reliability for your IT applications. Colocation facilities are typically heavily monitored and require authorization for physical access, ensuring your servers and data remain secure from theft.
Security & risk reduction
Compared to their on-premises equivalents, colocation data centers offer a higher degree of security and protection from risks such as data breaches and theft, due to their implementation of stricter security measures and adherence to compliance standards. Additionally, depending on its location, housing data off-site also minimizes downtime and other risks associated with natural hazards.
Data center colocation vs cloud
While the IT industry has framed colocation and cloud solutions as being at odds with each other, in reality, comparisons between the two are nuanced and situational.
On the one hand, colocation provides full physical control over the hardware and data, while also offering the benefits of fast internet connectivity, manageable pricing, and improved performance.
On the other hand, cloud solutions offer flexibility and scalability, allowing users to access their data easily while also being able to adjust to an organization’s changing demands.
Whether one needs to adopt colocation or a cloud data center depends heavily on the business’s needs. In fact, some have adopted a mix of both, as they can complement each other.
Colocation vs. Cloud: Key Differences
| Category | Colocation | Cloud |
| Strengths | Control and predictability | Flexibility and speed |
| Ownership | Company owns hardware | Solution provided by third party |
| Costs | Manageable and stable | Varied, usage-based |
| Best for | Always-on, high-performance, regulated workloads | Dev/test, burst demand, global scale |
Hybrid data center colocation and the cloud
For some businesses that do not need these heightened measures, colocation offers an intermediary step to ease migrating large deployments to the cloud: on-site hardware can be moved to a colocation data center with a fast internet connection so that it can be connected to cloud infrastructure, allowing a phased migration without interruption, and allowing large amounts of data to be quickly moved to the cloud as needed.
Some organizations will also adopt a permanent hybrid approach, leveraging both colocated and cloud infrastructure. For example, critical core infrastructure that is constantly under heavy utilization can be hosted in a predictably priced colocation environment, and cloud infrastructure can be on-hand, ready to kick in if demand outpaces the core infrastructure — allowing workloads to ‘burst into the cloud’ during periods of high demand, then return to normal operation.
Similarly, some businesses with large data storage requirements will store data in cheaper (but slower) object storage from cloud providers such as AWS S3, and then stage portions of it on high performance local storage only when needed.
Key features to look for when choosing a colocation data center
There are several key features you should look for when selecting a colocation data center including:
- Connectivity: Fast network and internet connectivity are must, as colocation relies on a high-speed connection to the broader internet (and thus, where you are working from).
- Redundancy: This is generally also a must, as redundancy is one of the most significant advantages of colocation, allowing your infrastructure to survive power outages and hardware failures.
- Physical security: This may depend on the sensitivity of the data you handle or your industry; however, at a minimum, you should expect 24-hour surveillance and access control.
- Backup and disaster recovery: If high availability is a requirement, you may use multiple colocation providers in different geographical locations allowing data to be backed up to a different region. Optionally, a fully synchronized redundant replica can be maintained for zero downtime in the event of a major disaster. Alternatively, you can back up your data to the cloud or set up their redundant infrastructure in the cloud, which comes with reduced costs as it is only used in case of emergency.
- Managed colocation services and support: Some colocation facilities will offer simple remote access options and basic on-site tech support. Ensure that your colocation service provider provides the on-site presence you require.
You should also consider the location of the colocation data center: if you’re going to need physical access yourself, it’ll need to be somewhere you can visit. You should also compare service level agreements between providers, to ensure that they are guaranteeing the reliability, redundancy, and uptime you are expecting. Be sure that you fully understand their cost and pricing models before committing, and that they are compliant with all applicable data privacy regulations.
Manage your colocated servers with a unified RMM platform.
Remote management is key for colocation and cloud IT infrastructure
Managing and maintaining the security of your IT infrastructure is paramount in an increasingly threatening cybersecurity landscape. You need full visibility of your servers and network to ensure that they are up-to-date and properly configured. NinjaOne’s Remote Management and Monitoring (RMM) can alert you of unauthorized access, security threats, and physical changes to your off site infrastructure — as soon as they happen.
