If you run a small business, colocation might be just the thing to help you out. It's essentially a hosting option that provides all the nice features that large IT departments usually handle—minus the large IT department costs. Best of all, whether all you need is a simple hosting option or a dedicated connection for Web servers, you can find it through colocation.
How Does Colocation Work?
If you have your own personal server, it can cost a bit to host it at your home/business, pay for the Internet costs, and keep it updated. Colocation allows you to have your server, but host it in a centralized location.
Basically, you'll have to set the machine up and manage it yourself, but you will get to split the price of hosting by storing it at a dedicated colocation provider (such as Cologix). They provide you with your IP, power, and bandwidth.
Pros and Cons of Colocation
If you have a handful of servers that need hosting, an Internet connection, high bandwidth speeds, and a good redundancy, you really can't go wrong with a colocation center. However, if you're just looking to host one website, it's probably a better option to use an online provider.
As mentioned above, colocation providers provide their own IT teams, which means you get the added benefit of having IT savvy professionals maintaining connections and security around the clock without having to pay annual salaries. On the downside, you're footing the bill if your server malfunctions.
Colocation facilities can handle up to thousands of different servers and websites, which means any power outage they suffer could affect millions of people. Because of that, they have all the protection necessary to keep everything up and running.
There's really no con here. Personal backup generators are expensive and unnecessary for a few hours without power (although they may help for those three-to-four day outages.) Not only that, but most couldn't handle the amount of power needed to maintain servers for that time.
When you depend on someone else to provide you with your servers, you may find that they don't always have the financial means to keep them updated/upgraded to handle increasing demands. Since you own the equipment, you can upgrade it whenever you want. Of course, that also means you're paying for it, too, and that can be expensive.
If you're moving your office to another part of town, whether it be your home or an actual business location, your website(s) will keep chugging away on the web. The only drawback is if you move hundreds of miles away. You might be outside the radius of your colocation provider, and, sometimes, finding one can be difficult.