Businesses today make more data than before. Because of this, they need a safe place to keep it. A colocation data center is a place where businesses can put their servers and equipment. This way, they do not need to build their own data center.
Many businesses use colocation since it is cheaper and easier. For example, they can rent space in a professional data center instead of making one. In this article, we will explain what a colocation data center is, how it works, and the three main types for different business needs.
What is a colocation data center?
A colocation data center is a place where businesses rent space for their IT equipment. In addition, the center gives power, cooling, internet, and security. Companies bring their own servers and other hardware.
Moreover, using this type of data center can save money. Businesses do not need to build their own data center. Instead, the provider takes care of the building, power backup, and security. At the same time, companies still control their own equipment and data.
According to Grand View Research, the global colocation market was USD 69.41 billion in 2024 and is expected to reach USD 165.45 billion by 2030.
How colocation data center works?
Colocation data centers work by sharing space among multiple companies. For example, each company has its own space. Also, the center gives power, cooling, and other things to run the servers.
In addition, it has backup generators to keep power on. Meanwhile, cooling systems stop servers from getting too hot. Moreover, security includes cameras, locked doors, and staff. Then, the servers connect to the internet using many networks.
As a result, the colocation data center takes care of all these things. Therefore, companies get safe and reliable service. Additionally, staff watch the center all the time and fix problems fast.
Types of colocation data center
Different businesses need different space and services. Colocation data centers have three main types. Each type is for different business sizes and needs. Each type gives different benefits. The benefits depend on the size of the business, money, and technical needs. Here are the details of each type.
- Retail colocation: Small and medium businesses can rent a single rack or cabinet in managed data center space. This works well for companies with only a few devices. The provider handles most technical services. In 2024, retail managed data center space accounted for nearly 70% of the market, according to Grand View Research.
- Wholesale colocation: Large enterprises lease entire rooms or building sections in a colocation data center. This type suits companies with many servers. Businesses get more control over their space layout. They can change the environment to fit their needs. Mordor Intelligence reports wholesale colocation will grow at 18.6% per year through 2030.
- Hybrid cloud colocation: Companies put their physical servers in a shared data center. They also use cloud services. This setup lets them move work between servers and the cloud. They keep important data on physical servers and use the cloud for other tasks.
Choosing the right colocation data center type depends on how much equipment you have. It also depends on your growth plans and your budget limits.
Building better connectivity for your data center
Colocation data centers need fast and strong connections. They use fiber optic cables to move data quickly. These cables link data centers and connect them to the internet. Strong fiber networks reduce delays and give better service.
To meet this need, ARNet provides dark fiber solutions in Southeast Asia. Dark fiber is fiber that companies can use by themselves. ARNet has over 10,000 kilometers of fiber and connects 60 data centers in Malaysia, Indonesia, Singapore, and Thailand. This helps hyperscalers and internet companies connect their facilities.
We own and run all of the networks. We do not rely on other companies. This helps us to give you fast setup, steady service, and over 99.99% uptime. Our solutions also can help you to monitor the network to fix problems early. Because of this, businesses using a colocation data center get one provider managing all connections, making it simple and reliable.
About the Author
Nabila Choirunnisa, Digital Marketing Executive at ARNet