Compare Colocation Hosting

Businesses looking into colocation for their servers need to vet hosting companies at the highest level. This article will give you insights into what you should expect, and we’ll also recommend the best hosting companies for the job.

Colocation provides more minute customer control over hardware while relying on the host’s security and expertise. Many hosting companies that provide dedicated hosting also provide colocation.

Later in this post, we’ll give a detailed analysis of each host. But for now, here’s a look at the best hosts for colocation:

  1. LiquidWeb – Ahead of the pack with virtualized services plus “heroic” support
  2. HostDime
  3. Sharktech

How Did We Pick the Best Hosts for Colocation?

We’ve reviewed over 1,500 hosting plans and selected the ones which offer colocation. We then picked the hosts which offer outstanding customer service.

Finally, we consulted real users via our massive database of genuine customer reviews, where we’ve identified the top hosts for colocation.

What You’ll Learn

Colocation is a specialized form of hosting that is often used by businesses requiring the highest security available and reliable uptime.

In this article, you’ll learn how to determine whether colocation is a good option for your enterprise.

We’ll look at attractive risk mitigation factors and what you should look for in a colocation host.

what is colocation hosting

What is Colocation Hosting?

Colocation is like mini-storage for servers. Companies often build data centers for themselves, or try to run servers out of office spaces. Instead, companies who need to run their own server equipment can rent server rack space, internet bandwidth, and even equipment from a colocation center.

Colocation is sort of a middle ground between consuming cloud infrastructure and building a dedicated data center. Any company that has server needs that cannot be met by existing cloud providers is a good candidate for colocation.

The History of Colocation Hosting

When the internet first started, servers were hosted at whatever organizations owned them. This was fine when the internet was limited to universities and research labs, but the growth of the World Wide Web in the ’90s meant more servers and fewer organizations familiar with their requirements.

A number of colocation providers sprang up to fill this growing need for a place to reliably host internet servers.

Who Uses Colocation?

With the growth of cloud computing and managed hosting, fewer organizations host their own web servers. Most of the customers for colocation are hosting providers themselves.

They might be ISPs, web hosting providers, or cloud computing providers. These customers need maximum control over their servers combined with the reliability of a data center.

Tech Industry

Colocation is especially popular with midsize organizations in the IT and internet sector, because it allows them to focus on specific value-added work rather than server logistics. This may include companies in the ecommerce, telecommunications, and industrial services industries.

Cloud Providers

Colocation is also very popular with providers of cloud infrastructure, who rent space for their servers and then rent out server access to cloud customers.

A lot of colocation facilities double as internet exchange points. Different carriers and ISPs can arrange for connections in “meet-me rooms”, specially designed for interconnecting carriers. It’s a win-win situation for the colo providers and ISPs.

They can connect without paying local loop fees, and they get extra redundancy in case their main communication links in other facilities fail.

What are the Benefits of Colocation Hosting?

The cost savings found in the large-scale data centers run by major companies can be realized by small and medium-sized companies that are essentially pooling their data center needs by renting shared facilities.

Additionally, colocation allows companies to quickly scale their server capacity up or down as needed.

Other benefits realized by this pooling of needs and resources include:

  • Cheaper floor space
  • Reliable access to power, battery backup, and generators
  • Experienced data center facility management
  • Disaster recovery resources
  • Extremely fast internet access
  • Very high bandwidth and low network latency
  • Professional security guards
  • Cheaper and more advanced climate control systems
  • Live equipment monitoring
colocation when to use it

Should My Business Use Colocation Hosting?

There are quite a few reasons why a company would lease or license colocation space rather than build its own data center.

Cost Savings

One of the main drivers for the use of colocation centers is financial.

Renting is often found to be more expensive than buying in the long run, but it is almost always cheaper on a shorter timescale.

Data Center Design

Another common reason to use colocation is a lack of expertise in data center and building management.

A software development company or a cloud infrastructure provider might possess the knowledge and experience to buy, configure, and run their own servers.

They might even have specific needs that make doing this (rather than consuming cloud services) the right choice.

But they might not have experience with building security, electrical systems, HVAC, and other physical requirements. In this case, colocation hosting may make more sense for them.

What Do I Need to Know About Data Center Security?

Without physical security, anyone can walk into the server room and cause mischief.

Hackers don’t have to break into machines over the internet, they can do a lot of damage with physical access to the server.

They might try rebooting a machine into single user mode and resetting the root password, giving them access to your data. They might attach a USB stick to a machine and install malware or copy sensitive data.

Does Colocation Hosting Offer Better Security?

Professional hosting companies employ strict security procedures.

Only authorized people, like system administrators, are even allowed into the machine room at all. They use mechanisms like key cards to prevent unauthorized access to the server room. Random people can’t come in and mess with your servers.

Common Security Measures in Colocation Hosting

Colocation buildings tend to be much more secure than standard hosting locations.

This is important for companies who handle secure or sensitive data. They often have physical security, such as guards and video monitoring.

Other building features might include:

  • Fire prevention and fire suppression systems
  • Locked cabinets
  • Cages
  • Server racks, both 19-inch (data) and 23-inch (telecom)
  • Overhead cable trays
  • Advanced climate control, including cooling and humidity management
  • Electrical grounding

Data Center Reliability: Does Colocation Offer Better Uptime?

As well as physical security, using a colocation center can also guarantee more uptime.

Many of these centers have a lot of experience hosting servers. As mentioned earlier, they have the right equipment to deal with the demands of servers running 24/7: power, networking, cooling, and expert technical staff.

Generators for Reliable Power

Most colocation centers have generators in case the data centers lose power, keeping your site up. Some larger colocation hosts have multiple facilities that they can use to spin up backup servers in case something catastrophic happens to the main data center.

Reduce Financial Risks

Colocated server hosting can also be used as a risk mitigation strategy.

A number of cost factors in self-hosting have significant variability, including:

  1. The price of electricity and bandwidth
  2. Property taxes
  3. Labor costs
  4. Business equipment insurance

By entering into long-term, fixed-price contracts with colocation service providers, small and medium-sized businesses can ensure predictable data center expenses, greatly reducing their exposure to financial risk.

What are the Downsides of Colocation Hosting

The biggest downside to colocation hosting is distance. There are times when direct, physical access to server equipment is needed. Depending on the location and volume of work, this can translate into travel costs and no small amount of aggravation.

Not Always Cost-Effective

Moreover, at a certain point, the economies of scale tip back in favor of building your own data center. If a large volume of servers will be needed for an extended or indefinite period of time, it may simply be more cost effective to house servers on company property.

Locked-In Prices Can Be a Drawback

There is also a certain amount of price risk involved. Several commodity pricing factors are included in the price of colocation hosting packages, including the cost of electricity and internet bandwidth.

If these prices go down, you may be stuck paying higher prices because of a long-term contract that locks in rates. (Of course, this rate lock-in can also be a benefit if commodity prices go up, as noted above.)

colocation alternatives

Alternatives to Colocation

Advances in virtualization have created alternatives to hosting physical servers in a colocation facility. VPS or cloud hosting are common alternatives to colocation hosting.

Why would you want to choose these options instead of colocation servers?




Virtual Private Server, or VPS.

Offers the advantages of a private server without having to own a physical machine.

More control, lower cost

Cloud hosting

Similar to a VPS, but the network and bandwidth capabilities of your servers are elastic.

Pay only for what you use and easy to scale up

VPS Hosting Versus Colocation

With a VPS, you get a virtual machine that lives on a physical server with other customers’ virtual machines. You get control over the actual software without the overhead of a rack-mounted machine to install.

Your hosting company takes care of the details while you concentrate on keeping your site up.

Cloud Hosting Versus Colocation

With cloud hosting, you only pay for the capability you use. This makes it a possibly cheaper alternative to colocation. It has the same advantages as a VPS. You don’t need to buy and maintain your own server. The hosting company takes care of the infrastructure for you.

If you have a low-traffic site, you can get by with smaller drives and bandwidth allowances. If your site gets a sudden burst of popularity, you can ramp up the capabilities to keep up with the demand.

Disadvantages of Cloud Hosting

The disadvantage is that if you’re using a public cloud hosting plan, your cloud servers share physical servers with others. For security or performance reasons, you might find this unacceptable.

Private Cloud Hosting

A private cloud with your own servers in a colocation facility gives you more control combined with the ability to spin up more capacity for your cloud servers when you need to.

If you don’t absolutely need the control a colocation facility gives you, you might be better off with the other options.


best colocation hosts

Our Top Choices for Colocation Hosting

Let’s face it: colocation hosting isn’t cheap. You have to buy the server, configure it, and deliver it to the colocation facility. That’s all on top of the fee.

More hosting companies are offering VPS and cloud options, so those are viable alternatives to a colocated server. Still, the people who do depend on colocation have advanced needs and are willing to pay to satisfy them.

Liquid Web

Liquid Web has plans starting at $150 a month. They are one of the companies that is touting its other virtualized services more. They seem to know which way the industry’s headed.

They’re known for their 24/7 “heroic support.” They’ll also help migrate an existing site.

liquid web colocation

Colocation hosting with LiquidWeb


HostDime offers colocation plans starting at $100 a month. They have connections to several major ISPs, including Global Provider, NTT, and Telefonica.

Users have the option of 1U racks or full suites.

host dime colocation

Colocation hosting with HostDime


Sharktech has data centers in Denver, Chicago, and Amsterdam. They support servers up to 4U in size. Plans start at $79 a month for a 1U server.

Clients also have the option of renting entire racks. Sharktech has redundant gigabit Ethernet links and DDoS protection.


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