A colocation centre (also spelled co-location, or colo) is a type of data centre where equipment, space, and bandwidth are available for rental to retail customers. They are sometimes also referred to as “carrier hotels.” Colocation facilities provide space, power, cooling, and physical security for the server, storage, and networking equipment of other firms—and connect them to a variety of telecommunications and network service providers—with a minimum of cost and complexity.
Colocation has become a popular option for companies with midsize IT needs—especially those in Internet related business. It allows companies to focus its IT staff on the actual work being done, instead of the logistical support needs which underlie the work. Significant benefits of scale (large power and mechanical systems) result in large colocation facilities, typically 4500 to 9500 square metres (roughly 50,000 to 100,000 square feet).
Claimed benefits of colocation include:
- A predictable and operational expenditure model
- Additional capacity can be brought on quickly, cheaply, and only as needed
- Better access to space and power
- Experienced professionals managing your data center facility
- An ecosystem of partners in the same facility
- Dedicated infrastructure to build your cloud strategy
- Lean infrastructure to manage during times of rapid business change
- A better road map for disaster recovery
Colocation facilities provide, as a retail rental business, usually on a term contract:
- lockable rack cabinets or cages,
- power in a variety of formats, AC and DC,
- network connectivity—either in a ‘house blend’, where the colo provider is a customer of carriers, and connects their clients to their own router for access to multiple carriers, or as direct ‘cross-connect’ access to the routers of the carriers themselves, or both,
- physical security (including video surveillance, biometric and badge access, logging, and the like), and
- real-time live monitoring of all these functions for failures.
They also provide redundant systems for, usually, all of these features, to mitigate the problems when each inevitably fails.
Among the economies of scale which result from grouping many small-to-midsized customers together in one facility are included:
- higher reliability due to redundant systems
- 24/7 monitoring by engineers
- lower network latency and higher bandwidth at a lower cost
- specialist staff, like network and facilities engineers, which would not be cost effective for any single client to keep on the payroll.
Major types of colocation customers are:
- Web commerce companies, who use the facilities for a safe environment and cost-effective, redundant connections to the Internet
- Major enterprises, who use the facility for disaster avoidance, offsite data backup and business continuity
- Telecommunication companies, who use the facilities to exchange traffic with other telecommunications companies and access to potential clients—a colo facility where many carriers are physically present is often called a ‘carrier hotel’; the presence of such a facility at a colo increases its value to some classes of potential customers.
- eCommerce sites, who use the facilities to house servers dedicated to processing secure transactions online.
Typically, colocation service offers the infrastructure, power, physical security etc. while the clients provide both storage and servers. Besides this, space a facility is either leased by room, rack as well as cabinet. Many colos today are expanding their portfolio to extend managed services that back their client’s business initiatives. Several reasons persuade business owners to opt for colo over constructing their own data center. However, the major driver in this space is CAPEX (or capital expenditures) usually associated with a large building or managing a big computing facility. Traditionally, colos were popular among the private companies mainly for disaster recovery. But in recent times they are used by cloud service vendors.
Furthermore, for few enterprises, colo is an effective solution, but there are certain downsides to such an approach. Distance often results in high travel costs especially when a device has to be touched manually. In such cases, colo clients often find themselves trapped into long–term contracts, which often prevent customers from re-negotiating the prices when they fall. Therefore, it’s important for a company to thoroughly examine its colocation SLAs (Service Level Agreements) so that they are not taken aback by the hidden charges.