What is Colocation? Server housing explained

Every company that manages its servers in a designated room appreciates the effort involved. The facilities that house the server technology must comply with strict security guidelines concerning digital access and direct access by third parties. Furthermore, the server must be cooled constantly and should not fail to operate in the event of a power supply outage. For companies, this presents the challenge of time-consuming management alongside greater financial burden. An alternative to this is the integration of your own server into an external computer center.

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What is server housing?

The external administration of one’s own server is referred to as “colocation,” “server housing” or even “server homing.” It involves outsourcing a company’s server hardware to a colocation data center. These computer centers are operated, for example, by Internet Service Providers (ISP) that already have the necessary infrastructure at their disposal. The ISP’s computer centers offer not only sufficient space for setting up external servers on so-called “racks,” but also a secure power supply, adequate air conditioning, and stable Internet access. The latter ensures that these centers regularly have access to fiber-optic cables installed for this purpose, which guarantee stable network availability.

“Server housing” is not to be confused with so-called “server hosting.” With hosting, it is not only the hardware that is managed, but also provider software. The host of the server authorizes customers to use it. In a sense, customers rent server utilization periods. The rented server can be located anywhere in the world. Customers have no physical access to the hardware. Housing in the computer center, in contrast, refers to the storage and connection of one’s server hardware to external data centers. The administration, management, and maintenance of your server are performed by the company itself provided that nothing else has been agreed upon. For basic work on the server, it is also possible to hire an external technician from the computer center operator.

Server housing is similar to dedicated hosting. However, while in the case of the latter one rents their own server from the provider, in the case of colocation, one in a sense only rents the storage space, including its infrastructure. The server itself belongs to the company and is housed in the provider’s computer center.

Who is colocation suitable for?

Outsourcing the server to a colocation center is especially practical for companies whose own facilities and network connections do not comply with the hardware’s minimum requirements for failsafe and downtime-time safe operation. Through colocation, business professionals can enjoy the advantages of excellent cutting-edge IT infrastructure and still operate their own server. This method is practical if the server contains highly sensitive data that must be protected from unauthorized access or if the server software is highly customized and complex. If companies cannot forgo operating their own server, yet their on-site facilities are not ideal, server housing is often a good solution for them.

Colocation costs

Another reason for using server housing is the question of costs. The setup and operation of one’s own server room not only requires a lot of effort to manage; it is also cost-intensive. Outsourcing your server to an external data center can save you costs. However, the expenses for server housing vary widely. This primarily has to do with the fact that there are differences in quality among the providers. Quality is measured according to the so-called “tier classification system,” with Tier 1 being the lowest and Tier 4 corresponding to the highest level of quality.

When choosing a colocation data center, it is recommended that you focus on providers that are Tier 3 standard. This tier guarantees that the server is accessible 99.98 percent of the time, which corresponds to a maximum downtime of 1.6 hours. In addition, it ensures stable power supply and reliable Internet access with high bandwidth of up to 10 GB/s. All these factors are essential for the server’s smooth operation and low latency.

Advantages and disadvantages of colocation

The biggest advantage of housing in a computer center is that a company can use the provider’s professional infrastructure. This infrastructure offers an optimal power supply and uninterrupted network availability. That’s because the wiring at computer centers consists of mostly ultrafast fiber-optic cables specifically installed for this purpose. The company you’ve hired can make use of all these technical advantages without you having to relinquish control over the software to external IT specialists.

A disadvantage of server housing is the considerable physical distance of the owner and operator from their server. Should none of the company’s IT experts be available within proximity to the data center, it is often difficult to rectify problems without the help of the computer center operator. This often incurs extra costs. Another negative is that a company’s own technicians can only access the company server at specific times – and only when accompanied by the computer center’s security personnel. This can be a problem when urgent repair work is needed. Also, fluctuating energy costs and a long contract period should be taken into consideration. All eventualities should be clarified with the provider before finalizing a contract, and if needed, with the help of a lawyer.

Advantages Disadvantages
Usage of the provider’s professional infrastructure Often long contract periods
Uninterrupted power supply Access only at specific times and solely when accompanied by security personnel
Constant and quality network availability via ultrafast fiber-optic cables Fluctuating energy costs
Ideal air conditioning for the devices The computer center’s considerable distance from the company headquarters can lead to difficulties during downtime
Security personnel (constant protection from unauthorized access)  
Protection of devices from physical hazards (fire, water, etc.)  
Software matters remain in the hands of in-house IT experts (especially practical when it comes to highly-sensitive data and complex, customized programs)  
Deductible rent costs  
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