What is Colocation and What Impacts Its Pricing?

Many businesses are considering colocation as an option for their IT infrastructure because of its many benefits. Colocation services allow businesses to store their data and applications offsite in a secure and reliable environment while saving on costs. As such, you need to understand the factors affecting colocation pricing to choose a provider that meets your needs.

What is Colocation and What Impacts Its Pricing

This article explores the factors affecting colocation pricing.


  • What is Colocation?
  • Factors Impacting Colocation Pricing
      • Your Space Requirements
      • Bandwidth and Connectivity 
      • Power & Cooling Requirements
      • Physical Security
      • Technical Support and Maintenance
      • The Location of the Data Center
  • Final Thoughts

What is Colocation?

Colocation is a service that enables businesses to host their servers and other computing hardware in a secure, off-site data center. This practice can help you save money on hardware and software maintenance costs since you don't have to maintain your own data center.

Factors Impacting Colocation Pricing

Below are the top factors affecting colocation pricing.

Your Space Requirements

The amount of space you need to host your IT infrastructure greatly determines your colocation pricing. The more space you need, the higher the costs. The size of the racks, cabinets, and cages and the rack density are some determining factors for your space requirements. 

You may need a full, half, or mini rack space, depending on your equipment size. And if you need more control over your servers, you can consider a private suite with lockable space – which comes at a higher cost.

Bandwidth and Connectivity 

Connectivity is a vital element of a colocation service and affects its costs. Your business needs a high-speed and reliable internet connection to ensure uninterrupted operations. As such, you may want a provider with a variety of carriers to allow you leverage on connectivity costs and efficiency. Ultimately, the connectivity costs at the colocation center are lower than in-house hosting.

Similarly, the amount of bandwidth your business requires affects server colocation pricing. The bandwidth you need will depend on factors like the type of applications running on your server and the number of users accessing your application at any given time. If your business needs a lot of bandwidth, you'll have to pay more for colocation. 

Power & Cooling Requirements

Colocation facilities are energy-intensive and require considerable power to run and cool equipment. You need reliable power to keep your servers and mission-critical applications running to ensure business operations continuity. As such, you want a colocation facility with redundant power options to meet your needs. 

The more power your equipment requires to run and cool, the higher the colocation costs.

Physical Security

Physical security is another factor that can impact server colocation pricing. A colocation provider that offers a high level of physical security, such as security guards, surveillance cameras, and secure access systems, may charge higher prices for their services. This level of security can be expensive for the provider, and they may pass these costs on to their customers.

Technical Support and Maintenance

Businesses can access round-the-clock technical support and maintenance depending on the provider and the type of service offered. Though some businesses may opt to deploy their on-site IT consultants, this option is more expensive. Thus, it is important to consider paying for technical support as part of your colocation package.

Technical support and maintenance services at a colocation center include emergency maintenance services, on-site support, network monitoring, and managed services. Colocation hosting providers provide varying levels of support and maintenance, so it's important to consider these when comparing colocation solutions.

The Location of the Data Center

Another factor that impacts colocation pricing is where your data center is located. For example, if it is located close to major cities, it will cost more than if it were located in a rural area with less demand for data centers. The reason is that more people want to use these services in urban areas due to their proximity to business hubs and other important locations like universities or hospitals.

Final Thoughts

Colocation is an effective way to store and manage your data with increased flexibility and reliability. Colocation pricing is largely determined by factors such as the amount of space and power needed, the level of technical support, and the data center's location. 

Understanding these factors will help you make an informed decision when selecting a colocation provider for your business.

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