What Are The Pros and Cons of Colocation vs. Managed Hosting?

Getting a colocation host to take over the housing and management of your servers offers a number of attractive benefits to many small and medium enterprises. There are a number of advantages over keeping physical servers at the work site or going with a virtual, cloud solution — and some businesses are definitely better off with one of those approaches. This handy blog will attempt to break out what makes a great candidate for going colo. If this introduction is insufficiently detailed, please feel free to call or text us. We love talking about solutions in detail, and our engineers occasionally get surly without human contact.

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The principal advantages:

  • Going with hosted colo offers economy of scale

  • You will see a greatly reduced risk of network outages (basically, 100% uptime guaranteed)

  • You will retain full control over software and hardware solutions 

Economy of scale

When you choose a competent colo provider, your team is essentially getting access to the full panoply of features and advantages that go along with being in a fully-armed-and-operational data center — but without the need to shoulder all the overhead costs up front. Cooling, physical security, access to after-hours support and emergency hands-on assistance are all taken care of. Generally, the network connections are faster and more affordable that deploying your servers on site, and it’s easier to arrange point to point connections, direct connections with major cloud service providers, and etc.


Better reliability and uptime

Colocation hosting can offer network uptime rates as high as 99.999 percent in practice — and some providers, including YellowFiber, have begun to offer 100% uptime guaranteed by SLA. Hosted colocation means you enjoy redundant systems, power, cooling Networks stay up and stay fast, and generators are lined up and ready to run for days and days after a serious power issue. Providers, again, like YellowFinber, also offer 24/7 network and systems monitoring — so that you can rest assured that if something completely terrible happens, you won’t sleep through it. It’s a great feeling having great engineers ready to get your back. It’s all very Kirk and Scotty.


Choices of hardware and software

It’s a common misconception that turning over their IT operations and configuration to a their party means reductions in choice for hardware platform or software choices. Colocation hosting can be ideal if you don’t have the heavy resources necessary to build out a full data center ($$$) — but you still need flexibility on hardware and software. A GREAT provider will really partner with you and offer advice and insight, and then show you some flexibility in meeting your needs.

Your provider will deliver the network infrastructure and physical housing — allowing you nearly unlimited freedom in what to go with.

Of course, if you want to offload even more of the work to a provider, a great NSP will be prepared to offer virtual servers, leased managed/hosted servers and etc.


  • Relatively more costly upfront
  • More responsibility for server administration and upkeep
  • Higher time demands for upkeep in person

Higher initial spend

With a colocation approach, you do avoid the costs of building out a proper data center on your own — but you still have to procure the servers and software, so the initial spend is relatively higher than a managed hosting approach.

In the event your organization is especially strapped for resources in the short term, going with a third-party managed hosting provider will save you a good chunk of change on the initial outlay. The downside is that you will have a bit less control over the granular choices for hardware and software options.


More responsibility for server administration and upkeep

Server colocation gives the servers you select and procure a great home — but unless you contract with a provider to maintain your deployed hardware and software, you will have just as much responsibility for keeping things running smoothly as you would if they were at your facilities. A good provider will have your back for minor issues as they’re likely to have personnel on site anyway, but colo just doesn’t offer the same support as managed hosting. If you already have limited personnel or resources to maintain your server environment, putting your machines in a provider’s data center won’t be a better option.

Under these conditions, you may well be better off contracting for a managed hosting arrangement. The economies of scale operate such that this can be more affordable than you might think.

Hands-on maintenance must be performed at the data center

Server colocation may not be right for every company, because of the high initial costs of procuring hardware and software. That said, the perks of being in a proper data center are manifold — and the costs and higher degree of management responsibility are really just a side effect of having maximized flexibility and control over your own setup. It offers a great balance of realizing the economies of scale of tagging along in a state of the art data center, and going with the equipment and software that you best like.


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Still not sure which approach is right for you? Call one of our engineers at 855-GO-FIBER. We love talking shop, and can help you sort through your options.
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