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Colocation 101: A Guide to Shared Data Centers

Colocation data center equipment lined in a row.

As businesses grow and technology evolves, managing IT infrastructure becomes increasingly more difficult. For many organizations, maintaining an on-site data center is no longer practical or cost-effective. This is where colocation comes into play. By leveraging colocation services, companies can house their servers and networking equipment in a third-party data center, gaining access to robust infrastructure without the overhead of building and maintaining their own facilities.

Colocation involves the space rented within a third-party data center, often referred to as a colocation facility or colocation data center. These specialized facilities provide secure space, power, cooling, and network access, supporting IT infrastructure needs while allowing organizations to outsource data center management.

What Is Colocation?

Colocation, often referred to as “colo,” involves renting space within a data center to store your own equipment, including computing hardware and networking hardware. These facilities have the necessary power, cooling, bandwidth, and physical security to keep your equipment running optimally.

In a colo facility, tenants are responsible for their own servers and hardware. Colocation involves placing your IT infrastructure in a secure physical location within the data center. Unlike cloud services, where you lease virtual servers, colocation allows you to maintain control over your physical hardware while benefiting from the data center’s infrastructure.

Benefits of Data Center Colocation

1. Cost Efficiency

Building and maintaining a private data center requires significant capital investment. Colocation reduces these costs by allowing businesses to share the expenses of power, cooling, and physical security with other tenants. Compared to an on premises data center, colocation significantly reduces capital expenditures and capital expenses by shifting infrastructure costs to a predictable operational model. This shared model leads to lower operational costs and foreseeable monthly expenses.

2. Enhanced Reliability

Colocation facilities are designed with redundancy in mind. They often feature multiple power sources, backup generators, battery backup systems, and connections to diverse power grids to ensure a reliable power supply in colocation centers. This infrastructure minimizes downtime and ensures that your services remain available to clients and employees. Colocation centers are also engineered to withstand natural disasters, providing additional resilience. Power usage effectiveness (PUE) is a key metric used to evaluate data center efficiency and operational performance.

3. Scalability

As your business grows, so do your IT needs. A colocation data center facility offers the flexibility to scale your infrastructure without the constraints of physical space or power limitations. You can easily add or remove equipment as needed, adapting to changing demands. Colocation space and data center space are available in various configurations, including retail colocation for smaller deployments and private suites for enterprises with specific business needs. Colocation solutions and colocation providers offer tailored options, including managed services and disaster recovery, to support your growth.

Developer identifying server issues.

4. Improved Security

Data centers prioritize security, implementing measures such as biometric access controls, surveillance cameras, and 24/7 monitoring. Colocation security includes video surveillance, advanced security controls, and strategies to mitigate security risks, ensuring comprehensive protection for your equipment and data. This level of security is often beyond the reach of individual businesses, so sharing a technical environment ensures that your equipment and data are well-protected.

5. Connectivity Options

Colocation facilities typically offer access to multiple network carriers, providing redundancy and improved performance. These facilities deliver robust network connectivity, interconnection services, and secure cross connects for direct connections to cloud providers, network service providers, and other service providers. Carrier hotels within colocation centers act as hubs for telecommunications and data exchange, while reliable internet access ensures your services remain fast and dependable, even if one provider experiences issues.

6. Focus on Core Business

By outsourcing the management of physical infrastructure to colocation vendors and colocation service providers, your IT team can concentrate on strategic initiatives rather than routine maintenance tasks. This enables businesses to focus on their core data center business and IT modernization. Many colocation facilities offer hybrid cloud integration, access to cloud providers such as Microsoft Azure, and support for public clouds.

Colocation solutions also provide access to other resources, such as high-performance computing and high-performance infrastructure for AI workloads. Colocation enables businesses to move their infrastructure to an off-site location, reducing reliance on an in-house data center. Colocation data centers are designed to meet evolving business needs. This shift allows for greater innovation and efficiency within your organization.

Why Businesses Should Use Colocation Services

Server racks in a secure data center room.

Colocation is particularly beneficial for businesses seeking to enhance their IT infrastructure without the burden of managing a data center. Colocation data centers are designed to enable industries to meet their evolving business needs by providing secure, reliable, and scalable environments. It is an ideal solution for companies experiencing rapid growth, requiring high availability, or needing to comply with stringent security standards.

Moreover, as the demand for data storage and processing continues to rise, colocation solution and colocation service offerings from leading colocation providers and colocation vendors are tailored to support a wide range of business requirements. According to CBRE’s North America Data Center Trends report, the surge in digital services and cloud computing is driving increased demand for data center capacity, making colocation an attractive option for many organizations.

How Netstar Can Help

At Netstar, we understand the complexities of managing IT infrastructure. Our colocation services are designed to provide businesses with secure, reliable, and scalable solutions tailored to their unique needs.

By partnering with Netstar, businesses gain access to veteran consultants that will help source the perfect colocation space and provider for their needs.

Colocation offers a practical and efficient alternative to maintaining an in-house data center. By leveraging shared facilities, businesses can reduce costs, enhance reliability, and scale their IT infrastructure with ease. Whether you’re a growing startup or an established enterprise, colocation provides the flexibility and support needed to thrive in today’s digital landscape.

To learn more about how Netstar’s colocation services can benefit your organization, visit our colocation services page or contact us for a consultation.