What Is Colocation and How Does It Work

colocation example

In today’s digital world, businesses of every size rely on data centers to handle seemingly limitless amounts of information. Some organizations have on-premise storage to handle their data, but they can be expensive and time-consuming to build. Fortunately, colocation provides a reliable, cost-effective data solution for your business.

So what is colocation? It’s a method of data storage that allows you to rent space in a specialized facility to store and use your critical IT infrastructure. Colocation data centers provide essential network connectivity, physical security, power, and cooling. 


What Is Colocation?

Colocation refers to the rental of server rack space and other computer hardware at a data center facility. Called colo for short, colocation is ideal if you want the benefits of a data center but don’t want to build and maintain your own facility. 

Under this arrangement, multiple organizations rent space from a single colocation data center. Organizations own the hardware while the colocation facility houses and sometimes maintains it. 

On top of that, this type of data center offers:

  • Network connectivity
  • Physical security
  • Power and cooling


Power is one of the most important services that colocation offers. From backup generators to an uninterruptible power supply, they help ensure that you can access your data at any time and under any circumstance.


Why are data centers important? Learn the power of data center providers.


Choosing a Colo Data Center: How Does It Work?

Choosing a colocation services provider is a critical decision for any business that relies on data storage, security, and connectivity. Here are some key factors to consider when selecting a colocation data center:

  • Connectivity
  • Cost
  • Expertise and support
  • Flexibility and scalability
  • Location
  • Reliability and uptime
  • Reputation and references
  • Security
  • Service level agreements


what is colocationConnectivity

Opt for a data center that offers robust connectivity options, such as diverse network connections and multiple internet service providers (ISPs). In most cases, this includes dozens of ISP options. A well-connected data center will ensure reliable, high-speed internet connectivity for your services and applications.



It’s important to understand the cost structure of the data center. Compare monthly pricing costs, which are often based on:

  • Disk drives
  • Racks
  • Cabinets
  • Suites 


Ensure that the pricing aligns with your budget and offers good value for the services provided.


Expertise & Support

Evaluate the level of expertise and technical support provided by the data centers on your list. This includes 24/7 support availability, on-site technicians, and services for troubleshooting and maintenance. At TenHats, we provide around-the-clock support to ensure that you get the help you need.


Flexibility & Scalability

Be sure to assess a data center’s ability to accommodate your current and future needs. Consider factors like available space, power capacity, and the ability to quickly scale up or down your infrastructure requirements as your business grows or changes. Choose a colocation data center that can accommodate changes in your business so you don’t have to find a new one later on.


Knoxville landscapeLocation

Consider the geographical location of the data center. Factors to think about include proximity to your business and accessibility for your staff. You should also evaluate the potential risks associated with the area including natural disasters. TenHats is uniquely located in the Tennessee Valley, protecting it on all sides from natural disasters such as floods and tornadoes.


Learn the importance of data center resiliency during storms.


Reliability & Uptime

The colo data center you choose should have a proven track record of reliability and high uptime. Check for certifications and strong uptime rates.

When gauging reliability and uptime, look for: 

  • Cooling systems
  • Backup generators
  • Network infrastructure
  • Redundant power systems


These features increase a data center’s reliability and uptime, allowing your organization to function with minimum interruption.


Reputation & References

Review the industry reputations of the data centers on your list. You can do this by looking up reviews and testimonials. You should also reach out to their current clients to learn about their first-hand experience and feedback.



It’s important to evaluate the security measures in place to protect your data. This includes:

  • Physical security such as access controls, surveillance cameras, and biometric authentication
  • Cybersecurity measures including firewalls, intrusion detection systems, and encryption 


Compliance with industry standards such as SOC II or HIPAA may also be relevant depending on your business needs. TenHats provides 24/7 armed security and high-level cybersecurity to keep your data safe. 


Service Level Agreements

Review the service level agreements (SLAs) offered by the different data centers on your list.  Look for guarantees on: 

  • Network uptime
  • Power availability
  • Response times for support


It’s also important to review any penalties for failing to meet these commitments. This lets you know what to expect if a data center doesn’t meet its obligations.

Take your time when considering these factors. This will allow you to make an informed decision when choosing a colocation data center that meets the needs of your business and helps you achieve your long-term goals.


Do you want to learn what TenHats can do for your business? Contact us today to start a conversation!


What is colocation? It’s a unique type of data center that stores your servers and other hardware while providing you with critical IT infrastructure. Choosing a colocation data center can be a time-intensive process. However, researching key factors such as connectivity, location, security, and SLAs can help you find the data solution you’ve been dreaming of.

In 2016, TenHats built the region’s first purpose-built colocation data center in over 20 years. Located in Knoxville, TN, our data center can serve any organization in East Tennessee and beyond. With our team’s IT experience, we provide a lot more than simply protected data. When you call us, you talk to a real IT expert. Connect with our team about our data center today!

Picture of Aaron Sherrill

Aaron Sherrill

Aaron is the Chief Technology Officer at TenHats leading the technology, cybersecurity, and data center teams of our organization. He has 25+ years of IT and security experience spanning across a variety of industries, including healthcare, manufacturing, and software development.

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