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Colocation Data Center

What Is a Colocation Data Center?

A colocation data center refers to a data center that enables you to rent out space for your own hardware. For example, instead of using your own on-prem space for your servers, cables, networking devices, and other computing equipment, you can rent out space in a data center.

What is Colocation?

This colocation data center meaning involves including the servers and other equipment from numerous companies in a single data center. The hardware is often owned by the business renting the space, and the data center staff only houses it.

It also alludes to the idea that a business's equipment may be spread out over several locations. For instance, they might have servers spread over three or four colocation data centers. This is crucial for international businesses that want to ensure their computer systems are situated close to their physical offices.

How Colocation Data Center Works?

This is how a colocation data center works: Enterprise customers use colocation data centers to store their servers and other gear required for regular business operations. Colocation ensures adequate bandwidth while providing shared, secure areas in cool, controlled surroundings suited for servers.

Difference Between a Data Center and Colocation

The primary difference between a data center and a colocation data center is that colocation refers to a service while a data center is a physical place. When thinking about cloud vs colocation, this is the most important distinction. A data center is a physical location that houses equipment used to power the cloud. Whereas colocation is a service you can use to set up your own cloud infrastructure or components in someone else’s data center.

Types of Colocation Data Center Facilities

The three main types of data centers in a colocation facility include retail, wholesale, and hybrid cloud-based colocation.

Retail Colocation

With retail colocation, you lease space inside a data center, typically either a rack, an area inside a rack, or your own caged-off room.

Wholesale Colocation

With wholesale colocation, on the other hand, you also get data center space but at a lower rate. As a result, the power the data center provides for running your equipment, as well as the space available, is less than what the data center would make available to a retail customer.

Hybrid Cloud-based Colocation

Hybrid cloud colocation involves setting up a combination of in-house data center space and that which you rent from another data center.

Fourteen Benefits from Colocation Data Centers

Using colocation space comes with many benefits, and if you need any of the following benefits for your organization, you may want to consider a colocation service.

1. Reliability

Colocation facilities provide reliable power, cooling systems, and communication that guarantee dependable connections. Companies can invest in the tools and procedures necessary to develop comparable systems internally, but doing so can be expensive, especially when it comes to paying employees and providing adequate in-house space.

2. Performance

Electronics function best in a climate-controlled, dust-free setting. The cooling and air filtering systems that professional data centers offer are superior to those of even the cleanest offices.

3. Physical Security

Data centers are built to secure your systems from theft and other threats that could jeopardize the security of your data and systems. They enforce strict data center security procedures and higher degrees of physical protection, such as video surveillance, private suites, and fire suppression systems.

4. Third-Party Maintenance

To guarantee that servers are operating at peak efficiency, data centers have specialized systems, employees, and resources that they use to create, monitor, and manage comprehensive support systems. This means you can rest easy, knowing your equipment will be properly taken care of by experienced professionals.

5. Speed

Colocation facilities enable high throughput and offer affordable connections directly to numerous internet service providers (ISPs). Having access to several ISPs gives you multiple options if you need more speed.

6. Skilled Staff

To monitor and manage servers, data centers include on-site, highly-trained, experienced IT personnel. These professionals design and implement modern reliable infrastructure to house your components.

7. Scalability

With colocation, you can scale your business up or down while only paying for the bandwidth and space you need.

8. Risk Management

Natural disasters and data breaches can certainly happen, but when your most important equipment is housed in an off-site data center, there are safeguards and backups in place to keep everything running.

9. Better Connectivity

Data centers have redundant network connections to guarantee the continuous operation of your most mission-critical applications.

10. Capability

Customers have the option of increasing their bandwidth without having to make additional investments. In this way, you can adjust how much bandwidth you use if, for instance, you deploy an application that needs to process a lot of data.

11. Premium Network Security

Data centers use the most recent firewalls to identify and stop illegal access to your systems. By using a colocation service, you benefit from the high level of cloud security that data centers establish for all of their customers.

12. Redundant Power Supply

Colocation centers make sure they have power by using a combination of several power grids, battery backup systems, generators, and rigorous maintenance procedures.

13. Growth

Colocation makes it possible to expand data storage to meet a company's changing needs. As a result, businesses can expand their networks without having to invest in additional hardware or real estate.

14. Stepping Stone

Colocation enables a seamless transition for businesses interested in transitioning core systems to the cloud. Moving your equipment to an off-site location can give you a seamless transition from an in-house to a cloud-based environment. This is because your most important systems are already running on the servers you shift to the data center. With colocation, you just have to connect to your existing applications, storage, and other resources through the internet.

Top 5 Considerations While Selecting Colocation Data Center

Here are the top five things you want to keep in mind when choosing a colocation data center:

  1. Expense. It can be very expensive to set up and maintain an in-house data center. Colocation, on the other hand, can give you the resources you need to support your computing equipment at an affordable rate.
  2. Compliance. In some cases, colocation can make it easier to satisfy regional data management requirements. For example, if your company is required by legislative regulations to maintain an off-premises storage facility for backups, you can use colocation to meet that standard.
  3. Performance. Without colocation, it can be difficult to have the power and bandwidth you need to support your most important business processes. But with colocation, the data center housing your components can provide a service level agreement (SLA) that guarantees adequate power and internet service.
  4. Redundancy. By using a colocation service to house backup systems, you can set up a reliable redundant infrastructure. This could be a business lifesaver if your in-house components go offline.
  5. Scalability. If you think you may need to scale up in the near future, colocation can make it easier because you can rent the space you need for additional servers and other components. But building the space in-house for an expansion can be economically infeasible for some organizations.

Security Pros and Cons of Colocation

Colocation comes with some important advantages and drawbacks when it comes to security:


  • Better physical security for your components
  • Power backups that can keep your systems running as they should even if an attacker tries to take down systems by cutting the power
  • Some colocation facilities also offer managed security services that give you experienced personnel and the most recent firewalls and anti-malware to protect your systems.


  • A lack of self-service security options, such as network monitoring and visibility tools. You would have to rely on whatever managed services the data center may offer.
  • It’s more difficult to create redundant computing systems that can run workloads in parallel between two or more colocation solutions. On the other hand, with a public cloud setup, it’s easier to establish duplicate processes. Therefore, colocation can reduce your resiliency if a primary computing process, such as payment processing for an e-commerce site, goes down.

Market Forecast For Data Center Colocation: Market Trend Analysis

The colocation market is poised to grow significantly over the next few years. For example, the overall colocation market size is projected to climb at a year-over-year rate of 13.3% between now and 2028. This is likely due to the increased use of cloud services by both enterprises and smaller businesses. In addition, many companies need to be able to scale up their data centers as their needs change, and the projected growth of the colocation market reflects this need as well.

How Fortinet Can Help?

Fortinet’s data center solution delivers data center security using FortiGate Next-Generation Firewalls, which can provide as much as 520 Gbps of throughput while filtering out dangerous data packets before they can harm your system. This enables you to manage risks in enterprise hyperscale networks by incorporating security into your hybrid IT infrastructure. As a result, you can provide automated protection of your network assets, as well as manage your entire system from behind a single-pane-of-glass.


What is a colocation data center?

The term “colocation data center” refers to a data center that enables you to rent out space for your own hardware.

What are the types of colocation data centers?

The three main types of colocation data centers include retail, wholesale, and hybrid cloud-based colocation.