Many small businesses are finding that they are expanding and, therefore, have increased IT infrastructure needs. This can present itself as the increased need for data storage, online communication, or product orders. It’s possible you have already invested in building a small private data center, or maybe you have only recently realized your increased need and are looking to resolve it.

Whatever the case, you are likely already familiar with the fact that building and maintaining a private data center can become very stressful, time-consuming, and expensive. Purchasing the right server equipment, installing the cables and cooling systems necessary, along with keeping knowledgeable staff on-site to help you solve any problems that are sure to arise, can become an unnecessary strain on your business, and can ultimately steal your focus away from real money-making pursuits.

There are many ways that colocation services can improve your business and make your life easier, but let’s focus on the two main benefits that these services offer.

#1: Reliability

When you decide to install your own server equipment on-site at your business, you are choosing to take on a huge amount of risk. The likelihood that you chose the location of your business due to the wonderful internet reliability is very low. Most likely, the location of your business was driven by the high physical traffic of potential customers, not the reliability and cost-effectiveness of running your servers. So, then, what sort of reliability can a data center offer?


Data centers are specifically located in areas that are offered high-quality, reliable internet through many different providers. Even if you are happy with your current internet provider, do you know if it is possible to forever increase the bandwidth needs of your on-site servers as your business continues to grow? If your provider experiences downtime or periods of slow service, what is your backup plan? If you are using colocation services, these are not problems that you would have to worry about.

Bandwidth / Network Speed

As your business grows, you will find that your IT needs will grow at an exponential rate. This could become a problem for your bandwidth, especially if you are dependent on a single internet provider. Data centers are outfitted with multiple high-quality service providers to eliminate the downtime and errors that are inevitable when you are trying to do it alone.


Housing your servers in a data center gives them highly increased security as well. The typical data center is monitored 24/7 by video surveillance and is much more protected against cyber attacks than a private data center could be. With the increase of cyber crime today, this is an indispensable commodity.

Environmental Control

The center also offers environmental control that could be impossible at your private location. If you have servers of your own already, then you know very well that the equipment is sensitive, and its environment must be completely regulated. It is important to maintain a cool temperature through cooling systems. Monitoring and regulating air particles and humidity is also important, and these are all things that data centers are outfitted to regulate.


The high level of reliability that can be offered through data centers is due to their implementation of redundant systems. This means that they have many different ways to accomplish the same task, whether it be energy or the internet.

As was already mentioned, when using colocation services, you can be provided internet service through many providers so that you will never experience downtime due to bandwidth, but the data center has you covered when it comes to electricity needs as well. It is inevitable that you will eventually run into a power outage, but this is unacceptable to the great majority of users online, and can lead to loss of data in your servers. This is never a problem in the data center because they are outfitted with redundant power sources and can withstand power outages of even unusual length at full capacity.

#2: Cost Effectiveness

Unlike building your own private data center, using colocation services can be a very predictable expense. It is hard for you to predict exactly how quickly your business will grow, or even diminish, and purchasing, installing, and maintaining server equipment can very quickly rack up to a ridiculous expense. Many businesses who are looking into what they will do about their IT infrastructure needs fail to see the costs associated with building a small private data center outside of the initial purchase of equipment and installation. Truthfully, these things are only a fraction of the costs that you will face. Let’s outline the some of the true costs of building and maintaining a data center in comparison with using colocation services.

Capital Expenses

These expenses represent the amount of money that you will spend on the initial purchase of servers, server equipment, cables and connection costs, the planning, designing and implementation of your setup, the cost of floorspace as well as building permits and local taxation. This will also include the costs of fire detection and elimination, cooling, humidity, and air filtration systems etc. All of these expenses, you may think, will be a one-time payout, but this is only true if your business never expands or grows. The truth of the matter is that all of these capital expenses will continue to grow as your business grows, and therefore your need for additional servers, space, electricity, security, and staff.

If you are using a colocation service, these expenses will be almost completely circumvented. All of the construction is already properly permitted, planned and finished, cooling, fire and filtration systems in place, and cables and fibers all hooked up throughout the facility. A huge benefit with using a data center is that, as your business grows, you can expand only as you see fit, and you can expand quickly and cost efficiently.

Operation and Maintenance Expenses

These will be recurring and, possibly to your surprise, will make up the majority of your expenses. Staffing and electricity will be the largest chunk of your total expenses over the course of just five years as server equipment requires a high amount of power and an expertise in staffing. You will also be looking at a highly variable need for internet capacity.

Different estimates say that your electricity will prove to be anywhere from 25-80% of your total cost in running a data center, but that largely depends on your location and local cost of electricity. You can rest assured, however, that a data center is located in an area with affordable electricity and internet bandwidth. Along with location, data centers have much more purchasing power in the market of internet and therefore can negotiate better prices than you would be able to achieve with a personal data center.

Another area that is often overlooked is the need for proper staffing with private data centers. A data center has an absolute need for dedicated staff that can monitor and alleviate any problems that could happen with your server equipment at any time, even overnight. Training and hiring IT staff can be very expensive, not to mention keeping them on the payroll 24/7 365 days a year, which is necessary for many companies who simply cannot afford crippling downtime. Thankfully when you use collocation services this area is much cheaper due to the fact that they are already well-staffed with IT professionals and monitored for any problems that could arise with your equipment.


Time is simply an indispensable resource for a growing business. If you plan on training yourself to become a data center and IT professional, or focusing a lot of time on hiring and training the proper staff for the position, you will lose copious amounts of time that you could otherwise be sinking into money-making pursuits. Not to mention all of the time and stress that you will spend simply researching, constructing, implementing, and maintaining your small data center, that is prone to unexpected glitches, problems, and downtime.

Building anywhere from one to four cabinets of servers and maintaining them for just five years, could run you over $800,000 in total, including every expenditure: Initial construction, floor space, electricity, electrical, HVAC and other maintenance, and redundant internet circuits. This estimate, of course, is very low because it doesn’t include 24x7x365 staffing by IT professionals, which could run you $300,000 more, conservatively.

Using a colocation service may not only alleviate your business from a large amount of unnecessary capital expenditure, and maintenance costs, but it can save you a tremendous amount of stress and time.