Server Colocation – Advantages, disadvantages & Alternatives

Server Co-location refers to the practice of physically re-locating your server(s) from your office/ server room to a fully managed data center, outside your premises. In this article, we will see why it is advantageous for companies to do that & what factors drive server co-location. We will also see the limitations of server co-location and a brief note on alternative technologies to server co-location.

What is Server Co-Location?

These days, its not mandatory to build your own data center to host your servers and applications. Especially, if you just have a few servers/users (or) your business requirements change dynamically. Business continuity is a critical factor these days, and any down time for important applications like ERP/CRM could mean loss of business opportunities. People are building data centers to ensure that their critical applications are always available. But smaller companies may not be able to afford all that capital investment to build their own data centers.

Server co-location services, might suit the smaller companies better because its possible to rent just the amount of rack-space/ power/ bandwidth required to host one (or more) servers in a service provider (shared) data center premises which already has multiple levels of redundancy (power, network, bandwidth, etc) built in to it to ensure high availability of servers and applications.

With Server Co-location, the servers need to be purchased by the customers and sent to the server co-location service providers, so that they can host it in their racks. Installation and maintenance of Operating System and other software applications needs to be done by the customer as well. The data center server co-location service providers host multiple such servers from many customers in the same data center/ same racks.

Customers generally pay for the rack space, bandwidth – data transfer, power and any additional facilities they might avail from the co-location data center service providers, on a monthly or quarterly basis. The contracts are generally for one year, but some of them offer more flexible plans.

Advantages of Server Co-location:

Lesser capital costs, as the networking/ bandwidth availability/ firewalls/ power/ cooling/ rack space etc, are provided by the data center service provider in exchange for a monthly rent. And they are shared with a number of customers.
High Availability, as most of the data centers employ redundant network routes, redundant (or at least back up) power, bandwidth lines from multiple service providers, centralized HVAC/cooling facilities, etc.
Security, as most of the data center hosting providers provide good physical security (24×7 security guards, biometric access, etc) and network security (shared firewalls).
Most of the data centers have centralized monitoring facilities for all the servers hosted in them using dedicated personnel, to ensure that customers are notified whenever a server/ application is not available.
Centralized IP KVM facilities are available with some co-location service providers for easier remote administration of the server.
Scalability, can be achieved faster and without upfront capital expenditures, as the customer can always rent more rack-space to host additional servers.
Server Co-location is very useful for hosting critical applications, as its generally quiet difficult/ expensive to provide the high levels of up-time/ network availability with small server rooms/ local data centers.
To a certain extant, it reduces the recurring costs of having local manpower exclusively to monitor/ maintain the data center infrastructure, if the servers are hosted in-house.

Dis-advantages of Server Co-location:

For larger companies with a lot of servers, it might be more cost effective (especially on the long run) to build their own data centers instead of co-locating their servers with co-location service providers.
If the servers/ applications are hosted in-house, most of the users can access them via the high speed LAN network which enables them to access the applications much faster (and the latency is also less). But when they have to access the same application from the co-location service providers via the Internet (WAN) connectivity, users might find the application access slower/ sluggish.
The amount of Internet bandwidth needed for all the users in the organization would go up, as all of them are accessing the applications from the co-location service providers over the Internet (WAN). This is in addition to the Internet bandwidth costs paid for the amount of data transfer incurred by the servers at the co-located data centers.
Some co-location service providers cannot fully monitor certain servers with uncommon operating systems like Debian/ FreeBSD – So, its better to check with the service providers before signing up contracts.
While scaling-up the number of servers might be easier as most of the service providers have the infrastructure in place for additional servers, scaling down might not be so easy, especially if you are in yearly contracts. Also, server co-location cannot account for sudden bursts of traffic for the applications.

Alternatives to Server Co-location:

Hosting the servers in your own server rooms/ data centers: This is the most obvious alternative. Hosting your servers yourself is always the best option, especially if you can achieve and maintain the reliability offered by data centers, in your own location. But smaller companies might find it quite expensive.

Hosting the applications on the Cloud: This is a more recent trend that is catching up pretty fast. A cloud hosting service provider creates all the infrastructure required for hosting servers (along with the servers), at their location. You could just upload your application(s) on their infrastructure and pay per hour/ total units of bandwidth consumed, depending on the service provider. This is an excellent option for companies which experience sudden bursts of traffic for their applications, as the capacity required can be instantly upgraded/ downgraded anytime. For heavy media intensive & global delivery based applications, Content Delivery Networks might be a good option.

Managed Server hosting: This is similar to server co-location, but in this case, the servers/ Operating Systems are also provided by the managed data center service provider and the customer pays a monthly/ quarterly rent for the infrastructure. But there are limitations to the available server configurations and operating systems supported by the vendors. The customers are responsible for installing/ maintaining the applications which run in the servers.

Virtual Private Servers (VPS hosting): This is normally not suggested for enterprise customers, but if there is a small application with a few users that needs to go online, and doesn’t require an entire server – this could still be a good option. In VPS hosting, hosting service providers host the servers and related infrastructure in their data centers, and allow different customers to share a single server but with shared resources like RAM/ hard disk capacity, etc. The processors might be common to all the customers (shared on equal sharing basis) and the customers pay monthly rental to utilize this service.

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