Web Hosting Reviews & Ratings

January 19, 2009

The Advantages and Disadvantages of Colocation

Businesses who cannot afford to house their server hardware and host their own operation should consider colocation.  This option is quite similar to dedicated hosting in terms of flexibility and control but that is where the similarities end.  With colocation, you are physically housing your server and associated hardware at the provider's facility.  They provide you with the utmost in security, regulated power and a dedicated internet connection.  This type of arrangement ensures the maximum up time and security you simply can't get when trying to host your operation on site.  Some of the notable enhancements include fire detection and suppression systems, 24/7 surveillance, backup generators and multiple backbone connections.

Colocation Provides Added Flexibility

Colocation provides a level of flexibility that surpasses both dedicated server and managed hosting by far.  For instance, you have the luxury to choose your own servers as well as all the hardware, software and configurations that come along with it.  The major difference compared to managed hosting is that you are responsible for maintaining the server as the provider generally provides 24-hour access to the facility.  However, this high level of responsibility and associated costs are the two biggest disadvantages of colocation hosting.

Higher Convenience - Higher Cost

With colocation, you are not only required to pay for own server and equipment, but also the physical space the hardware will take up in the provider's facility.  Almost always, this type of arrangement calls for a much higher capital investment than leasing a dedicated server from a web host.  Figures from Digital Nation report that a low-end, quality server ranges around $4,000 with mid-grade hardware coming in around the $9,000 mark.  Additionally, for just a half rack worth of space in the facility the general costs are often between $500 to $700.   These are factors that need to be carefully considered as you must pay for rack space on a monthly basis.  You may also be required to purchase a router or switch, vital network components that range up to $2,000 for low-end models. Last but not least, you will definitely need a network interface card, one of the most overlooked elements when deciding on colocation.  All of these costs do not include the time staff must be paid for setting up and configuring hardware.  They don't cover for insurance, hardware depreciation or backup equipment.  All of a sudden, colocation becomes a very costly solution that is only suited for a selected few.

You will find that every colocation provider is structured in their own way and require different capital layouts.  Most of them do however, offer service contracts which typically cover maintenance of the hardware and its connections.  These contracts make the provider liable for ensuring that your business enjoys a guaranteed up time each month.  The downside here is that the price may soar higher as the guaranteed up time increases.

Before deciding on colocation, it is important to first evaluate your personal requirements.  From there, you should assess the level of services able to meet those needs by comparing a few companies.  When making these assessments in advance, you can get a better idea about the level of security, connectivity and what, if any add-on services will be required.  In the end, this will save you a lot of time and help to keep your budget intact.

Tags: Managed Hosting,  dedicated internet connection,  dedicated hosting,  colocation,  up time,  server hardware,  security