by: Reuben Yonatan, Tech Enthusiast and Analyst at GetVoIP & CloudHostingHQ, providing guidance to Voice Over IP and Cloud Computing consumers.

A colocation center, sometimes shortened to just “colo,” is a facility in which businesses rent space inside a dedicated facility. The space is often provided by an Internet service provider, or it has gateways to ISPs and PSTN carriers. The facility provides the space, the power and cooling, and bandwidth. Some facilities include security monitoring for an additional fee. The customer puts in their own equipment, like servers. There are advantages to placing your servers in a colocation facility, and also some reasons why it might be better to have your own dedicated site.

Colos are expected to run 24 hours a day, seven days a week, 365 days a year, even during emergencies. They should be expected to have redundant interruptible power supplies, battery and/or diesel fuel backup generators, and a 100% uptime SLA. The facility should be able to support many types of hardware (e.g. Cisco, Sun Servers, Apple), and be able to support many kinds of providers (e.g. we hosting, VoIP, data storage).

Collocation, by definition, means turning your equipment over to an off site facility, and has the inherent disadvantages of renting off site space. When you have your own facility, you can monitor your equipment easily, and with your own staff. You don’t have to trust in your colo’s security when you can rely on your own. Another potential downside is that if the colo is far from your site, it will take a long commute. If you are upgrading your equipment constantly, that can take its toll. As with all real estate, there is also the concern of cost, which can be significant, and can also go up over time.

Colocation can end up saving you in other ways though. The cost of a renting a colocation facility can be less than the bandwidth you would pay from your provider. Colocation facilities make for great redundant backup, and colocation facilities themselves usually have redundant backup. If you choose to have the facility do security and maintenance on your servers, you can rest easy knowing the engineers on site are top notch. Collocation is a good option for startup and turnkey businesses; collocation facilities can easy scale up or down depending on the needs of the customer. Particularly for small businesses, colo can provide a more state-of-the-art facility than they could afford starting out.

There are many options to consider if you are renting a colocation facility. One is location. A colocation facility, because it is not on-site to your business, can really be anywhere in the world. If you want to pay for the cost of managing your equipment, you can have your servers anywhere in the world, even in another country. You have to take into consideration if you want to have a hands-on or hands-off approach, especially if you move your own business.

Another option to consider is how much do you want. Colos offer many service tiers, ranging from units to half racks and whole racks, to cabinets, cages, and even entire floors. Colocation plans usually include a certain number of usable IP addresses, and bandwidth, which can be anywhere from 1Mbps up to 1 Gbps. Some providers include power as part of their package, others do not. Collocation providers will work with you to customize your service.

You also want to do your homework to determine what is included and what is a surcharge. The difference of a few questions regarding price can mean the difference of hundreds of thousands of dollars if your needs are great enough. When dealing with large figures, don’t be afraid to negotiate.

VoIP providers looking into collocation should consider the specifics of the location, particularly in regard to points of presence. VoIP providers need access to various gateways, including PSTN gateways, SMS gateways, and IP nodes. Data storage and backup providers will want to look into the redundancy of the facilities or the colo provider. Because they are in the business of selling redundancy, it is all the more important to them that no data ever be lost. Web hosting and e-commerce sites should pay close attention to the security offered at collocation facilities. Valuable information about customers and the company can’t be allowed to fall into the wrong hands.

No company is too large for collocation. Even Google purchased an entire building dedicated to colocation. When looking for the right colo for you, take into account your needs and your budget, and you can make a sound investment for the well-being of your web-based business.