Colocation is the name given to the concept of housing your computing hardware and infrastructure at another location. You can have someone else manage your hardware or manage it yourself, but you do not own facilities that house the computing equipment.
This is in contrast to owning your own datacenter or virtual private server. If you have your own hardware but don’t want to pay the overhead costs of storing it then you can have it stored somewhere else for a fee. It’s called colocation.
So what are the benefits of colocation?
One benefit we’ve already mentioned. You can cut your management costs by not having to deal with the operating costs of storing your infrastructure. It’s expensive enough to maintain the hardware then to add on top of that the cost of electricity, the systems to keep the computers cool, etc., the cost of maintaining the hardware can be profit eating.
Another benefit is the potential of paying someone else to manage the infrastructure for you. Personnel costs are important too. By paying someone else to manage your infrastructure you can potentially save more money in the long run.
Security is another element to look at. If you choose the right facility then your infrastructure will be more secure than at your own location.
As smaller companies grow, their computing needs grow with them. You can actually outgrow your physical location just by growing your computing assets. If you find yourself outgrowing your location, consider the cost of moving to new facilities just for the purpose of expanding your computing needs. It may actually be less expensive to pay for a colocation service to keep and maintain your hardware instead of moving your entire brick and mortar installation.