How Much Does Server Colocation Cost? (Video)


Having servers on-site at your office can be a pain—your equipment needs to be in a strictly temperature-controlled area that is completely secure from all angles but is still relatively accessible so that it doesn’t take you ten minutes just to access your device and don’t even get us started on cabling.
Some organizations don’t want the hassle, others simply don’t have the means to provide a proper home for their infrastructure. In some very unfortunate cases, like one we saw with a long-time client of ours, organizations are forced out of the space they had been using as a shared server room, and are left with no other choice but to colocate their equipment elsewhere.
When you take all of these scenarios into consideration, it will probably come as little surprise that we at Optimal have gotten a lot of questions about the cost of server colocation over the past two decades. It’s a complex answer, but below we’ll break down all of the elements in play with this solution, along with associated price ranges.

What elements are involved in server colocation?

The main elements at play in a colocation scenario are as follows:

  • Rack Space. This is the literal amount of room that your servers will take up in the datacenter’s racks. This space is measured in the unit “U,” which is equivalent to 1.75 inches in height. Most rack-mount servers will take up 1-2Us of space.
  • Internet. When you colocate equipment, you must have some means of bridging the distance between your office and the datacenter you’re renting space from. This typically takes the form of an Internet-based VPN connection. In some scenarios, you’ll need above-average bandwidth in order for your applications to function at proper speed over this connection. You may also need to purchase dedicated IP addresses from your provider if your existing Internet Service Provider does not service that particular datacenter.
  • Support. Will an outsourced provider be responsible for monitoring and patching your equipment? Will you be taking care of that yourself? Will you be sending someone out to the datacenter on a regular basis to put their eyes on your equipment? Colocation is not a managed service, so you have to identify another means of caring for your equipment.
  • Setup. Your equipment has to be physically moved to and installed in the datacenter one way or another. This will either require time on the part of an internal team, or project labor on the part of your outsourced IT provider.


What is the average monthly price range for server colocation?

Each of the elements above comes with their own associated costs.
On average, you’ll find datacenters renting Us of rack space out for $100 to $300 per U per month.
Generally, this monthly fee will include a pre-set allotment of bandwidth and IP addresses. If, however, you have incredibly dense equipment or the need for an incredibly large number of IP addresses, your provider will likely tack on an additional charge.
Server monitoring is its own separate service, but does need to be taken into account if you’re looking at total costs of colocation. As we explained in a previous article, this service can run you anywhere from $75 to $400 per server per month.
Lastly is implementation. Depending upon the number of servers you’re migrating into the datacenter, you’re looking at a one-time investment of $500 to $3,000 in engineering labor.

Are you looking to colocate your servers? Struggling to vet the datacenter  providers out there? Let us know--we can help.


What other, indirect costs may be involved?

If you migrate your servers to an off-site datacenter, chances are you’ll need to make some changes to your internal infrastructure in order to accommodate the change.
Keep these factors in mind when figuring the total cost of server colocation:

  • Internet. Since you will now be connecting to your network over an Internet connection, you may need to upgrade your own Internet bandwidth from your office to the datacenter (separately from any power or bandwidth needs within the datacenter itself). You’d also do well to look into a redundant configuration, so that you have a backup connection should your primary line fail.
  • Infrastructure. You’ll also need to take a good hard look at your firewall and switch infrastructure, since they absolutely must function properly in order for you to access your data remotely.
  • Backups. With colocation, your data will automatically be off-site. If something happens to your office, then, you’ll be protected. But what if something happens at the datacenter? It’s always best to have your data in multiple places so that you’re protected at all levels of disaster.

As you can see, there’s quite a bit to consider when you’re looking to colocate your servers.
The good news is this: you won’t have to work through all of these layers and technicalities yourself. While it’s always helpful to understand what you’re actually paying for on those monthly invoices, your provider will be able to work through your particular needs and associated costs, and present them to you in a cohesive package.
From there, it’s a matter of making sure you contract with a provider you trust, and one that will place your equipment in a state-of-the-art facility.
You wouldn’t trust just anyone with your data, would you?