Server colocation is essentially placing your servers at a colocation facility where they will be maintained and linked up to telecommunications or network service providers in order to provide your company with the required bandwidth. You can even rent servers from the colocation providers but owning your own servers will mean that you can set it up before taking it to the colocation facility. It is an option worth considering for mid-sized businesses with moderate IT needs but which cannot afford to have IT staff around to manage the servers or to have large enough bandwidth needs to make data transfer more cost-efficient.

Services that are typically offered at a colocation facility include lockable racks to store your servers, cooling, security (surveillance cameras, restricted personnel access etc.), power, and network connections. There is usually a degree of redundancy for all these services, such as having both battery backup systems and two power inputs, in case the any aspect of the services fail which can impede the functioning of the servers. Therefore, your servers will be maintained by an external provider, freeing up your IT staff to focus on work related to your business instead. It is also in the interest of the providers to make sure that your servers are secure, constantly powered and kept cool since their reputations rest on how well they carry out these services, therefore you can expect a level of maintenance which cannot be provided even by on-site IT staff. The cost will also be significantly lower than if you maintained the servers yourself since the providers will be able to pool their resources to obtain the best industrial-scale equipment which is more cost-efficient if the equipment can serve several small- to medium-sized businesses.

The same idea goes for bandwidth as colocation providers will be able to get competitive rates from network service providers due to the sheer volume of bandwidth they sign up for. This means that you will pay considerably less for much better bandwidth if you opt for colocation.

The downside to server colocation is that it costs more than normal web hosting services so those who might not necessarily need all the services provided the colocation facilities may want to weigh the pros and cons of both services before deciding which to go for. You will also need to transport your servers physically to colocation facility but these facilities are not easy to find so it might be difficult to find a colocation facility near your company. Nonetheless, it is very suitable for medium sized businesses which need significant presence on the Internet.

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