Skip to content


Choosing Colocation Can Be the Smart Business Choice

Styrmir Hafliðason shares how colocation can compliment on-premise data centres and cloud-based services and why it may be the smart choice for your business needs.

One of the unexpected silver linings of the coronavirus pandemic has been recognition of the role data centres have played in keeping our communities functioning during global lockdowns. Organisations scrambled to get their employees up and running in a work from home environment. Sadly, many realised their data center infrastructure was not up to the challenge.

Many businesses are recognising the potential and importance of colocation data centre facilities. Prior to the pandemic, colocation was a key – often growing – element in their overall IT operations; complementing or even replacing on-premise data center facilities and cloud-based services alike. In the last six months, the major hyperscalers – who have their own vast facilities – have turned to colocation facilities to quickly ramp capacity needs as the world turned online practically overnight.

The reasons to pick colocation over build-your-own are perhaps even more valid today than they were when the industry first established itself all those years ago. Here are some of the main benefits of choosing colocation over your own in-house data center facility:

CAPEX Avoidance

Designing, constructing, and then equipping a data center is, quite frankly, eye-wateringly expensive. By choosing to colocate your IT equipment in a specialist provider’s premises, you’re eradicating this CAPEX from your balance sheet. Here, you pay a monthly fee to keep your servers and other equipment with a third party, and this typically includes power, security, and cooling, as well as any other factors that are included in the contract. This makes the cost of managing your data center portfolio completely predictable and manageable.

Ability to Innovate

The rate of technological advancement in the data center has probably never been faster. Third-party colocation providers are data center experts. They are better placed to navigate the various technologies that promise to make facilities faster, more efficient, less impactful on the environment, and secure. In addition, they enjoy economies of scale that organisations running their own operations could simply never achieve.

Scalability & Flexibility

At a colocation facility an organisation can rent as little as one rack in a data center, taking on more space on an incremental basis as their operations grow. This degree of flexibility is far more in keeping with today’s ‘on-demand’ culture for procuring IT services. What’s more, it mitigates risk and alleviates the need to build out facilities that are over-capacity.

Connectivity Options

High capacity, reliable connectivity is vital to the smooth running of an organisation’s operations, while it’s also critical to have both primary and secondary network connections in the event of a planned or unexpected outage. With colocation, the number of organisations that choose to host their equipment at their facilities means it’s lucrative for multiple network operators to establish Points of Presence (PoPs) at these facilities. As a result, colocation customers can pick from a wide range of connectivity options, selecting the providers and services that best suit their needs in terms of capacity, contention rates, routes, service level agreements (SLAs), and, of course, tariffs.

Facilities that Match Individual Applications

Different applications require different data center environments, all of which come with different price tags. Data that is highly sensitive and closely regulated needs to be collected and stored in a highly secure facility with stringent compliance controls and guarantees around uptime and security. Yet, the same company might also be running a number of back office applications that aren’t quite so mission critical. An on-premise data center would have to provide an environment that is capable of supporting the company’s most demanding application, even if the majority of their apps can function without this level of provision. Colocation enables a company to host different applications at different third-party facilities, each located in an optimal environment, or find a provider who offers different tiers of service within the same facility.

For most organisations, a mix of colocation, cloud and on-premise solutions will be the appropriate way forward, with the exact combination depending on how risk averse you are, the nature of your business, and the regulatory framework you must adhere to. But perhaps the most important thing to remember is to pick the right hosting solution for each of your applications.

If you’d like to learn more, download our new white paper “Colocation: An organisation’s guide to when to pick colocation; and how to choose the right provider”.