Colocation explained
You buy the servers; the facility provides the rack, the power, the cooling and the network. Everything above the power socket is yours, including the drive to the datacentre at two in the morning.
- You provide
- Servers, disks, spares, and someone to install them
- Facility provides
- Rack space, redundant power, cooling, physical security, bandwidth
- Billed by
- Rack units or racks, power draw (kW), and transit or port
- Only sensible when
- Hardware is already owned, or utilisation is high and steady for years
What you are buying
Space measured in rack units, power measured in kilowatts, and network measured as a port speed with a commit. The facility's value is the things that are impractical to build: utility feeds with generator backup, N+1 cooling, carrier diversity and controlled physical access.
Remote hands — facility staff performing physical tasks on request — is the line item that determines whether you can operate it from a distance. Check the rate, the response time, and what counts as a billable task.
The costs that are not on the quote
- Hardware refresh on a three-to-five-year cycle, as capital
- Spare parts on the shelf, since a failed disk is your failed disk
- Travel, or remote-hands fees in place of it
- IP address allocations and possibly your own ASN and transit arrangements
- The staff time that a managed provider was previously absorbing
Against that, the marginal cost of capacity at scale is far below rental, and the hardware is an asset rather than a subscription. The crossover is real but it sits a long way up — typically multiple fully utilised racks running for years.
When it makes sense
High and steady utilisation over a long horizon; regulatory or contractual requirements about physical custody of data; specialised hardware nobody rents; and organisations that already own equipment and need somewhere better than an office cupboard for it.
For almost everyone else, a dedicated server delivers the same isolation with none of the capital, the spares or the travel.