Colocation and Managed Services

A colocation facility (collocation) or carrier hotel is a type of data center where multiple customers locate their network, server, and storage gear and interconnect to a variety of telecommunications, network, and/or internet service providers (ISP), without the cost and complexity of locating, designing, constructing, and maintaining their own data center.

Increasingly, small through large businesses are recognizing the benefits of hosting their IT infrastructure assets in a collocated data center facility due to the time and cost savings they can realize by using the shared data center space and support infrastructure. Small businesses can especially gain from this arrangement such that they can have access to the data center features of a large IT department without the significant associated costs with building it themselves. Significant benefits of scale (support infrastructure systems) result in large colocation facilities, typically 50,000 square feet and more. With IT and communications infrastructure and services in colocation facilities, telecommunications, internet, ASP, and content providers, as well as enterprises, can enjoy greater availability, less latency, and the freedom to focus on their core business.

The majority of colocation providers provide their clients with on site physical security, suitably available power and cooling, and network security in addition to daily and/or periodic maintenance. Additionally, customers can reduce their traffic back-haul costs and free up their internal networks for other uses. Moreover, by outsourcing network traffic to a colocation service provider with greater bandwidth capacity, web site access speeds can improve considerably.

The biggest drawback of using colocation providers is the relative cost of a long-term contract and the difficulty in locating and evaluating a suitable vendor. The ideal situation is to identify a colocation provider near where you are located, so you can upgrade and maintain your server with ease and on demand availability. If your company is located in an isolated area, with limited infrastructure, there can be severely limited colocation options available.

The 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 interexchange traffic with other telecommunications companies and access to potential clients

In contrast, a managed services provider (MSP), is typically an information technology (IT) services provider, who manages and assumes responsibility for providing a defined set of services to their clients either proactively or as they (not the client) determine that the services are needed. Most MSPs bill a flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT support costs.

Many colocation service providers serve dually as MSPs and provide their services as part of a turnkey outsourced data center offering. Common services provided by MSPs include remote network, desktop and security monitoring, patch management and remote data back-up, as well as technical assistance.