As IT needs grow, many enterprises turn to colocation for a flexible and secure way to manage infrastructure. Colocation enables you to maintain full control over your hardware within a third-party data center equipped with top-tier facilities. 

This approach offers a cost-effective path to scalability, enhanced security, and high availability—without the expense and complexity of building and managing your own data center. 

With colocation, you can focus on optimizing IT operations while trusted experts handle the physical infrastructure.

Article features include:

• What is colocation?
• How colocation works
• Benefits of colocation
• Colocation use cases
• Challenges of colocation
• Comparing colocation with other solutions
• How to choose the right colocation
• Why the right choice is Meter Connect

What is colo?

Colocation, or "colo," offers a smart way for businesses to house their own servers, storage, and networking equipment in a top-tier data center without the expense of building one themselves. 

By leasing space in a third-party facility, you gain access to advanced infrastructure like redundant power, climate-controlled environments, and high-speed connectivity—all essential for keeping your hardware running smoothly.

Colocation facilities also prioritize security, with 24/7 monitoring and biometric access controls to protect your equipment. Many are carrier-neutral, so you can connect to multiple Internet providers for reliable, low-latency connectivity. 

With colo, you stay in full control of your IT infrastructure while sidestepping the high costs and challenges of managing an in-house data center.

How colocation works

When businesses choose colocation, they rent physical space in a third-party data center to house their IT infrastructure. The space can be as small as a single rack, a larger cage, or even an entire room, depending on the scale of their needs.

The data center operator provides essential services like power, cooling, physical security, and network connectivity. Meanwhile, the business retains control over its own servers and other hardware, managing and maintaining these assets as needed.

Colocation allows businesses to leverage the advanced infrastructure of a data center—such as redundant power supplies, climate control, and robust security—without the overhead of building and maintaining a facility themselves.

In practical terms, it's similar to leasing space in a state-of-the-art facility where the landlord takes care of the building’s core infrastructure, while tenants focus on optimizing and managing their specific equipment and operations.

Benefits of colocation

Colocation offers several important benefits for businesses, particularly from an engineering perspective:

1. Cost efficiency: By sharing the costs of top-tier facilities, businesses gain access to high-end infrastructure without the hefty investment. This approach is especially advantageous for smaller companies that might otherwise find these resources out of reach.
2. Advanced security: Data centers prioritize security, with biometric access controls, 24/7 surveillance, and on-site security teams to keep your hardware safe.
3. Scalability: As your business grows, so can your setup. Simply add racks or upgrade to a larger space within the facility as your IT needs expand.
4. High reliability: These facilities are designed with built-in redundancy, including dual power supplies, backup generators, and multiple Internet connections to ensure uptime and minimize downtime risks.
5. Access to premium infrastructure: Gain access to advanced resources like high-speed Internet, sophisticated cooling systems, and reliable power management—features that would be costly to develop independently.

Use cases for colocation

Colocation is a strategic choice for businesses seeking specialized infrastructure, enhanced security, and compliance support in a flexible, high-performance environment.

Disaster recovery

Businesses looking to protect their operations from unexpected disruptions often turn to colocation. By placing important infrastructure in a colocation facility—whether near or distant from the primary business site—companies can maintain operations even if their primary data center is compromised.

Hybrid cloud setups

As businesses increasingly adopt hybrid cloud models, colocation plays a significant role in these strategies. Colocation facilities can host private cloud components, offering the security and reliability needed for sensitive workloads. Integrating these private cloud resources with public cloud services allows companies to achieve greater flexibility and control over their IT environment.

Meeting compliance requirements

Industries with strict regulatory requirements, such as finance, healthcare, and government sectors, find colocation facilities particularly beneficial. These facilities are often designed to meet rigorous data protection and privacy standards, providing a secure environment that aligns with industry regulations.

Using colocation helps businesses maintain compliance, reducing the risk of penalties and demonstrating strong governance over their IT infrastructure.

Each of these scenarios demonstrates how colocation can serve as a powerful tool in a company’s IT strategy, providing the resilience, flexibility, and security needed to support important operations.

Challenges of colocation

Colocation offers significant advantages, but it comes with challenges that require careful management, especially in network engineering.

Physical access requirements

Colocation necessitates physical access to your hardware, unlike cloud solutions managed remotely. Because of this, complications in routine maintenance, upgrades, or troubleshooting can arise, particularly if the data center is far from your operations.

To mitigate this, invest in remote management tools like Meter’s proprietary Dashboard, which allows for remote monitoring and control of your hardware. You may also wish to consider using local "remote hands" services to handle on-site tasks, minimizing the need for your team to travel.

Dependence on the colocation provider

Your uptime and reliability hinge on the colocation provider’s performance. Issues such as power outages or network failures on their end can directly impact your operations.

To reduce this risk, thoroughly vet providers for their track record, service level agreements (SLAs), and redundancy measures. Implementing a multi-site strategy or hybrid cloud setup can also ensure that your operations continue smoothly, even if one location encounters problems.

Cost implications

While colocation can be cost-effective, it’s essential to consider all expenses, including:

• Hardware transportation
• Setup
• Ongoing maintenance

To manage these costs, conduct a comprehensive total cost of ownership (TCO) analysis and compare it with alternatives like cloud hosting or maintaining an in-house data center. Optimize your hardware to avoid over-provisioning, and consider leasing or buying pre-configured racks to reduce setup time and costs.

Comparing colocation with other solutions

Choosing the right data hosting option involves understanding the key differences between colocation, cloud services, and on-premises data centers. Each option brings its own advantages, particularly in control, cost, and complexity.

Colocation vs. cloud services

Cloud services involve virtualized resources managed by a third party, while colocation allows businesses to maintain direct oversight of their physical hardware. The setup is particularly beneficial for companies with unique hardware requirements or those that need dedicated equipment to meet specific compliance standards.

With colocation, you have the flexibility to choose and manage your own servers, storage, and network devices, offering a degree of customization that cloud solutions often do not.

Colocation vs. on-premises data centers

Compared to on-premises data centers, colocation offers a more cost-effective and less complex alternative. The capital investment required for building and maintaining an on-premises data center is substantial, including expenses for physical space, power, cooling, and security.

Colocation mitigates these costs by providing access to an established, high-quality infrastructure, allowing businesses to pay only for the space and resources they need.

The operational responsibilities of managing an on-premises data center—such as maintaining power, cooling, and security—are managed by the colocation facility, allowing internal IT teams to focus more on core business objectives rather than the complexities of data center management.

Choosing a colocation provider

Selecting a colocation provider requires making a well-informed choice, especially for network engineers responsible for maintaining reliable and secure infrastructure.

Here’s how you can approach the decision:

Location

The physical location of the colocation facility significantly impacts your operations. If your applications are latency-sensitive, proximity to your business and customers becomes a deciding factor.

A well-situated data center can reduce latency, leading to better performance and an improved user experience. Also, consider the facility's exposure to potential natural disasters that could disrupt services.

Connectivity

Network connectivity is a fundamental aspect of colocation services. Examine the provider’s connectivity options, focusing on whether they offer multiple carrier connections. Redundant carrier options provide resilience, allowing operations to continue without interruption if one network fails.

Look for direct peering options, low-latency connections, and scalable bandwidth to accommodate future growth.

Security

The security measures in place at the colocation facility should be thoroughly evaluated. Key areas to consider include:

• Physical security: Features like biometric access controls, 24/7 surveillance, and on-site security personnel are important.
• Cybersecurity: Look for measures such as firewalls, intrusion detection systems, and regular security audits.
• Compliance: The provider should adhere to relevant industry standards and regulations, such as PCI DSS or GDPR, depending on your needs.

Support services

The level of support offered by the provider can have a significant impact on your operations. Consider services like:

• Remote hands: Availability of technicians to assist with on-site tasks, reducing the need for your team to visit the facility in person.
• 24/7 monitoring: Continuous monitoring of your equipment to detect issues early.
• Technical support: Access to knowledgeable support staff who can provide timely assistance, especially during incidents that require immediate attention.

Choosing the right colocation provider involves carefully assessing these factors to ensure that the facility aligns with your technical and operational requirements. Each element contributes to maintaining the reliability and efficiency of your network infrastructure.

Next steps: Simplify colocation with Meter Connect

Simplify your colocation journey with Meter Connect. Our service not only helps you understand the ins and outs of colocation, but also takes the guesswork out of selecting the right provider. 

Meter Connect matches your specific requirements—whether it’s reducing latency, boosting security, or planning for future growth—with colocation facilities that meet your needs.

With access to a broad range of carrier-neutral connectivity options, you’ll have the flexibility to choose the best network providers for your business. 

Plus, Meter’s complete Network as a Service (NaaS) solution lightens the load on your IT team by handling everything from network management to ongoing support. Focus on growing your business, knowing that Meter is here to keep your network secure, scalable, and high-performing every step of the way.