What is Colocation & How Does it Work? | Neos Networks

What is Colocation & how does it work?

  • Neos Networks

What is Colocation?

Colocation is the practice of renting server space and hardware at an external data centre facility. Colocation service providers offer equipment, space and bandwidth to all businesses, from large enterprises to SMEs looking to minimise travel costs and capital expenses.

Some advanced colocation facilities offer customers a powerful mix of colocation and advanced connectivity services – providing a secure home for data replication, data archive, data backup, network access, aggregation and regeneration systems.

In today’s super-connected world, when data centre downtime can lead to a significant loss of revenue, Colocation can deliver an assured, monitored service and help maximise your productivity and profit.

What is data centre colocation & hosting?

Colocation could mean moving your primary IT equipment to a data centre, or it could entail keeping backup systems at a remote site, for disaster recovery situations. Moving systems to the cloud is a form of colocation.

There are various advantages to colocation, particularly if you don’t have adequate IT infrastructure or it needs updating. It can also save you finding space for your IT equipment during a period of expansion. Colocating means hosting your data in a third-party facility, and they are also responsible for maintaining an optimum environment for your data, in terms of space, connectivity, power, cooling and security.

How does colocation work?

Your business will need its own server hardware and software, but your hosting provider will ensure it all stays in top condition. Usually, they won’t be hands-on with the physical server, unless you require direct administration. This extends to replacing servers.

Your business will also need to set up your server at the data centre, as well as the hardware and software add-ons required. Essentially, choosing colocation means transplanting your current IT infrastructure to a different location, where your hosting provider will be responsible for its upkeep. Many provide 24/7 IT support to ensure things run smoothly for your business.

How much does colocation cost?

There are many variables that affect the cost of colocation:

  • Amount of power required
  • How power is delivered to the cluster
  • Physical space taken up by your server(s)
  • Degree of network connectivity
  • Speed of network
  • What tier facility you choose to house your data

As with any business premises, location is also a factor affecting price. Data centres in central locations, or those within easy reach of transport connections such as airports, often attract higher prices.

How much on-site support you require is, of course, another variable that affects price. Ultimately, your requirements are the most important factor at play, with a quality hosting provider offering customised services to meet your needs. Once your provider better understands your business, colocation costs will become clearer.

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Colocation FAQs

Take a look at our FAQs for Colocation

  • What is colocation?


    Colocation is the practice of renting server space and hardware at an external data centre facility. Colocation service providers offer equipment, space and bandwidth to all businesses, from large enterprises to SMEs looking to minimise travel costs and capital expenses. Find out more about colocation.

  • What are the advantages and disadvantages of Colocation?


    Managed Colocation provides an appropriate environment for your IT assets and mitigates the many risks associated with using them. It helps customers save costs, provide better connectivity, improve network security and offer scalability. But the associated risks depend on your data centre supplier’s facilities and your organisation’s tolerance for security and downtime.



  • What are colocation services?

    As well as providing server space and hardware for your data, colocation includes services such as data archiving, replication and backup, as well as aggregation, IP transiting and re-generation systems. 

    There are also less obvious advantages of colocation, such as advanced power, cooling and security systems. In addition, you will benefit from access to a reliable, high-bandwidth, low-latency network.

    In terms of security, data centres offer a much higher level of security than the majority of business premises. Common measures include perimeter fences, constant camera surveillance and security officers, mantrap security doors, biometric security and keycard scanners.

    You can upgrade or downgrade the colocation services you pay for, according to the changing needs of your business.

  • What is a colocation data centre?

    A colocation data centre is a facility that offers businesses data storage and hardware solutions. They owe their name to the way they store the data of companies alongside that of other companies. This model allows businesses to benefit from facilities and services that they might not otherwise be able to afford. 

    Data centres rent out various categories of space to clients, including anything from cabinets to cages and private suites. The size of the space you rent out will depend upon your business’ needs. 

    They are often situated just outside major cities – to minimise the distance data has to travel from and to the majority of clients – but also within easy reach of internet exchanges or peering points. This way, data centres can avoid passing expensive city centre rental costs onto clients, while still enjoying prime locations for the highest quality network connections.

  • Colocation hosting features

    For companies considering data colocation, there are many factors to weigh up and the best solution will depend upon each company’s needs.

    In addition to the basic hosting of data and hardware, data centres offer security and high-capacity network connections. Some also offer round-the-clock support and/or remote management tools. While the data centre provides the infrastructure, the client will put components such as servers and firewalls into place. 

    An important feature is redundancy, which involves having extra network devices and connections in place, which means you don’t suffer from any downtime if one networks fails. Easy, 24-hour access to your data is a must.