The global pandemic ushered in a work-from-anywhere transformation. It also contributed to the rise of slick co-working spaces, which offer an alternative to working from home along with traditional office perks like ergonomic furniture, shared office equipment, and conference rooms. But there’s another “co-benefit” out there that is perhaps less widely known: colocation.

Colocation is the practice of housing your data servers in a physical, third-party facility. Just as a co-working space is an alternative to working from home, co-location is an alternative to hosting your critical servers on-site. Most often, a colocation provider will rent server spaces within a shared data center.

No matter the size of your operation, colocation can deliver a multitude of business benefits. Small businesses can use colocation to achieve the key features of a large technology department without the capital investment. Larger businesses often rely on colocation as a cost-effective way to expand their technology estate to accommodate growth.

Are you considering a shift from on-site data hosting to colocation? In this post, we introduce you to the basics and highlight four key advantages of colocation, including cost savings, enhanced security, scalability, and resiliency. 

What is colocation? 

With colocation, your privately-owned servers and networking equipment is installed in a professionally managed data center, rather than on your own premises. With traditional, on-premise data hosting, you’re likely paying for space within your own building, including the costs for necessary cooling measures and maintenance. Colocating shifts this burden to an external provider who can deliver the ideal conditions for safe, secure, and always-on data hosting. To ensure rapid access to your servers, a high-speed network connection is established between your office and your colocation facility As a result, you can quickly access your servers, storage, and network elements when and as you need.

Four Benefits of Colocation

If your team relies on on-premise data hosting, the idea of relinquishing physical control of your critical servers to a third party can seem counter-intuitive. At the same time, the shift toward colocation has increased in recent years—the pandemic drives some of this growth, but so too does its logical advantages. Here, we consider four business benefits of colocation.

Keep Costs Under Control

If you host your servers on-site, you likely incur significant costs to hire skilled technicians, power your servers, and pay for proper cooling systems. Often, on-premise data facilities have antiquated infrastructure or are located in structures originally intended for other purposes, all of which can add to your operational costs. There’s also the sometimes sky-high cost of the space itself, including rent and property and sales tax. 

On average, a single rack in an on-premise data center costs $120,000 over 10 years, about half of which is capital expense and half is operating expense. For example, in a typical breakdown of total cost of ownership, the racks alone may comprise 2% of the cost while the electricity can comprise 20%. With colocation, you share the costs of power, cooling, and energy with other tenants, which keeps these costs down. Every dollar saved is another dollar you can re-invest back in your business. 

Enhance Data Security 

We all know that cybercrime is on the rise, in step with the rise of remote work.Yet, physical data security remains a prime concern for the modern business. The 2020 Cost of a Data Breach Report finds that 10% of breaches were caused by a physical security compromise at on-site data centers (and a price tag of $4.36 million!).

Colocation shifts the responsibility for data security and compliance to your colocation provider and their built-in data security apparatus. With the right colocation partner, you’ll have around-the-clock physical security to keep your racks safe, such as locked cabinets, card scans and biometrics, CCTV monitoring, and alarms. It’s hard to put a price tag on the peace of mind that comes with having expert surveillance and security surrounding your critical servers. 

Future Proof your System

Another benefit of colocation is its scalability: your business has guaranteed room to grow. With most colocation providers, you simply need to work with the team to quickly and easily scale your service based on your unique projections and needs. You can also rely on your colocation partner to provide expert support on critical updates. Just as colocation brings peace of mind for physical security, it also means that your systems will stay up-to-date to support your growth. With on-premise data hosting, you might need to secure more space in your data center, or find another facility altogether, to accommodate business growth and expansion. 

Build Resiliency

Colocation also supports business continuity. Your business relies on critical applications that need to be up and running at all times, like your website or Microsoft Outlook. Any number of scenarios can occur within your physical server room that would prevent these applications from running properly.

Keep in mind that cybersecurity and physical security are not the only dangers facing your on-premise data center. Natural disasters like flood or fire, power outages, and even another global pandemic can all interfere with normal and necessary operations. In March 2020, for example, a tornado hit the Nashville headquarters of Western Express, a national trucking company, damaging multiple buildings including the location of a central IBM Power 9 server that “did all the operational heavy lifting.”

While no facility is immune from disaster, colocation centers can provide the critical resiliency measures that your individual business simply can't, such as skilled engineers to work 24/7, multiple generators, and additional back-up sites.

If your technology infrastructure disappeared overnight, what would happen to your business? At N8 Solutions, we can help your team make the move to colocation, so that you never have to find out.

Please get in touch with our team today to learn more: Call (262) 288-1501 or complete this simple form.