# Top Reasons Why Colocation Services Are Good Source: https://lyrahosting.com/blog/top-reasons-why-colocation-services-are-good/ 1. [Home](https://lyrahosting.com/) 2. [Blog](https://lyrahosting.com/blog/) 3. Top Reasons Why Colocation Services Are Good Blog Written by [the LyraHosting technical team](https://lyrahosting.com/about-us/#team) · Reviewed by Erik, certified Linux system administrator (LFCS) · Published 10 Jun 2022 · Updated 4 Nov 2026 · 7 min read Colocation means placing a server you own in a provider's data center. You bring the hardware; the provider supplies the rack space, power, cooling, network connection and physical security around it. You keep full control of the machine without building or running a server room yourself. This article explains why companies colocate, when colocation isn't the right choice, what a colocation plan usually includes, and what to check in a contract before you ship a server. ## What is colocation? With colocation (often shortened to "colo"), you rent space in a data center rack, not a server. The space is measured in rack units (U): one unit is 1.75 inches (44.45 mm) high, and a standard rack is 19 inches wide. A small server takes 1U or 2U; larger customers rent a quarter, half or full rack, or a private cage. The provider runs the building: power with battery and generator backup, cooling, fire suppression, access control and connections to network carriers. You run the server: you buy it, install the operating system and software, and keep it secure and backed up. That is the main difference from the alternatives: - On-premises: the server sits in your own office or server room, and you provide the power, cooling, security and internet connection yourself. - Dedicated server: you rent a server that the provider owns and maintains. - VPS or cloud server: you rent a share of the provider's hardware as a virtual machine, which you can resize without touching any hardware. ## Why colocate: the main benefits ### 1. A data center without building one A server room with backup power, precise cooling, fire suppression and round-the-clock security is expensive to build and maintain. In a colocation facility, every customer in the building shares those costs, and you pay a monthly fee for your part. ### 2. Backup power Data centers are built to keep equipment powered when the grid fails: uninterruptible power supplies (UPS) bridge the first moments, and generators take over during longer outages. Few offices have either. ### 3. Better connectivity A colocation data center usually connects to several network carriers, and often to an internet exchange, with far more capacity than a business internet line. Your server gets a fast uplink, usually 1 Gbps or more, and with more than one carrier, traffic can take another route when one of them has a problem. ### 4. Physical security In a professional facility, access to the server floor is controlled with badges, transponders, keypads or biometrics, visits are logged, and the building is watched day and night. That is hard to match in an ordinary office. ### 5. Your own hardware, your choice You choose the processor, memory, disks, RAID controller and network cards, and you can reuse servers you already own. The disks that hold your data stay your property. For hardware a provider doesn't rent out, or software licensed to a specific physical server, colocation is often the simplest way to run it in a data center. ### 6. More predictable costs Once the server is bought, the monthly fee covers the space, power and network, often with a traffic allowance or unmetered traffic. Unlike usage-based cloud billing, the bill doesn't grow with every extra hour of processing or gigabyte sent. For a steady workload run over several years, owning and colocating a server can cost less than renting the same capacity. ### 7. Remote hands on site Remote hands is the provider's on-site staff doing physical tasks for you: pressing the power button, swapping a disk you sent, checking a cable or a status light. You don't have to travel to the data center for routine work. ### 8. A location you choose You can place your hardware in the country and data center you prefer, for example close to most of your users, or with a provider that operates under a privacy-first jurisdiction, without moving your business there. ## When colocation isn't the right choice - You pay for the hardware up front. Servers are a purchase, not a rental, and they need replacing after some years. - Hardware failures are yours to fix. When a disk or a power supply fails, you supply the part. Remote hands can fit it, but you have to get it there, so keep spares. With a dedicated server, the hardware and its repairs are the provider's. - One server is still one server. A data center protects against power and network failures, not against a failed motherboard or a deleted database. Staying online through those takes a second server and backups. - Growing takes time. More capacity means buying and shipping another server. A VPS or cloud server is faster to resize. - Small sites don't need it. For a website or a few small applications, web hosting or a VPS costs less and needs no hardware at all. - Visits take planning. If the data center is far away, working on the hardware yourself means travel and following the facility's access rules. ## What a colocation plan includes Plans differ between providers, but most are built from the same parts: - Rack space: a number of rack units, a quarter, half or full rack, or a cage. Check your server's depth, and whether it needs rails. - Power: sold in amperes at a given voltage, or in kilowatts. For example, 0.5 A at 230 V is about 115 watts. Measure what your server draws under full load, not at idle, and leave a margin. - Network: a port speed, such as 1 Gbps, with a traffic allowance, unmetered traffic, or billing by usage, often by the 95th percentile. Our article on [10Gbps and 20Gbps dedicated servers](https://lyrahosting.com/blog/10gbps-and-20gbps-servers/) explains metered and unmetered bandwidth. - IP addresses: a few IPv4 addresses, often IPv6 as well, and on some plans [a BGP session](https://www.rfc-editor.org/rfc/rfc4271.html) to announce your own IP space. - Remote hands: a number of tasks or minutes included each month, with extra work charged per task or per hour. - Cross-connects: a direct cable from your rack to another network or customer in the same building, usually for a setup fee and a monthly fee. - Out-of-band management: a separate connection for the server's management controller (IPMI, iDRAC or iLO), so you can reach its console and power controls even when the operating system or the main network is down. - DDoS protection: filtering on the provider's network, included at a basic level or sold as an add-on. - Installation: racking and cabling the server when it arrives, either free or for a one-time fee. ## What to check before you sign a colocation contract 1. Space and power, exactly. How many rack units, what rack depth, how many amperes at what voltage, and what happens if your server draws more. If the server has two power supplies, ask whether a second power feed is available. 2. Network and traffic. The port speed, whether traffic is unmetered or metered, any fair usage policy, how many IP addresses come with the plan, IPv6, and whether you can announce your own IP space with BGP. 3. The uptime commitment. What the provider guarantees (the network, the power or both), how downtime is measured, and what you get if the commitment is missed, which is usually a service credit. 4. Remote hands. What is included each month, what extra work costs, how you request it and when staff are available. 5. Delivery and installation. Where to ship the server, who receives it, whether racking is included, and what to send with it, such as rails and power cables. 6. Access. Whether you can visit the data center, how to arrange a visit, and the facility's access rules. 7. Security and standards. How the building and the server floor are secured, and which standards or certifications the facility holds. If they matter to you, ask for the current certificates. 8. Contract terms. The minimum term, the notice period, how prices can change, and how you get your hardware back when the contract ends. 9. Liability. What the contract says about damage to your hardware and about data loss, and whether you need your own insurance. 10. Content and complaints. The provider's acceptable use policy, and how it handles complaints about what your server hosts. Read the contract itself, and ask the provider about anything this list doesn't cover. ## Colocation with LyraHosting Our [offshore colocation plans](https://lyrahosting.com/offshore-colocation/) place your 1U or 2U server, built for a standard 19-inch rack, in one of our three data centers in the Netherlands, as long as there is space when you order. We operate under a privacy-first jurisdiction. - Price: from €49.99 a month for 1U and €59.99 a month for 2U. - Power: 0.5 A at 230 V on both plans. - Network: an unmetered 1 Gbps uplink and one IPv4 address, with 2 extra on request. 10 Gbps connectivity is available on request, and we quote it to your requirements. - Remote hands: available 24/7, with one task a month included; extra work is charged separately. - Installation: ship your server to us, and we rack and connect it free of charge. - DDoS protection: Layer 3/4 protection for your IP addresses, with 10 Gbps included and more on request. - Client panel: real-time traffic statistics, reverse DNS and DDoS settings. - Your own IP space: BGP sessions are available as an add-on. We guarantee 99.9% network uptime, and our team answers support tickets 24/7/365, with a first reply within 1 hour. We don't process US DMCA notices; complaints go through the procedure in our Acceptable Use Policy. Your content must be legal and follow our [Acceptable Use Policy](https://lyrahosting.com/acceptable-use-policy/). Before you ship anything, you can test our network from the [data centers page](https://lyrahosting.com/datacenters/), with a test IP, test files and a looking glass. Would you rather not buy hardware? Rent an [offshore dedicated server](https://lyrahosting.com/offshore-dedicated-servers/) in the same data centers instead. In this article 1. [What is colocation?](https://lyrahosting.com/blog/top-reasons-why-colocation-services-are-good/#what-is-colocation) 2. [Why colocate: the main benefits](https://lyrahosting.com/blog/top-reasons-why-colocation-services-are-good/#why-colocate-the-main-benefits) 3. [When colocation isn't the right choice](https://lyrahosting.com/blog/top-reasons-why-colocation-services-are-good/#when-colocation-isn-t-the-right-choice) 4. [What a colocation plan includes](https://lyrahosting.com/blog/top-reasons-why-colocation-services-are-good/#what-a-colocation-plan-includes) 5. [What to check before you sign a colocation contract](https://lyrahosting.com/blog/top-reasons-why-colocation-services-are-good/#what-to-check-before-you-sign-a-colocation-contract) 6. [Colocation with LyraHosting](https://lyrahosting.com/blog/top-reasons-why-colocation-services-are-good/#colocation-with-lyrahosting) Keep exploring [All blog articles](https://lyrahosting.com/blog/) [Talk to our team](https://lyrahosting.com/contact-us/) ## Host it offshore with LyraHosting Colocate your 1U or 2U server in the Netherlands with an unmetered 1 Gbps uplink and monthly remote hands. [Explore offshore colocation](https://lyrahosting.com/offshore-colocation/) [Contact us](https://lyrahosting.com/contact-us/) Keep reading ## More from the blog [View all](https://lyrahosting.com/blog/) 01 / From the journal Blog · 25 Sept 2023 ### [Offshore Hosting: Benefits and Use Cases of Offshore Servers](https://lyrahosting.com/blog/offshore-hosting-benefits-of-offshore-servers/) What offshore hosting is and isn't, its benefits and limits, what it doesn't protect you from, who uses it and how to choose a provider. 7 min read [Read article](https://lyrahosting.com/blog/offshore-hosting-benefits-of-offshore-servers/) 02 / From the journal Blog · 22 Oct 2023 ### [10Gbps and 20Gbps Dedicated Servers Explained](https://lyrahosting.com/blog/10gbps-and-20gbps-servers/) What a 10 or 20 Gbps dedicated server is, how much traffic it carries, unmetered vs metered bandwidth, and the port speed you need. 3 min read [Read article](https://lyrahosting.com/blog/10gbps-and-20gbps-servers/) 03 / From the journal Blog · 15 Oct 2023 ### [What Is a Streaming Server and How Does It Work?](https://lyrahosting.com/blog/streaming-server/) What a streaming server is, the hardware and software it needs, its protocols (RTMP, SRT, HLS, MPEG-DASH, WebRTC) and how to size it. 4 min read [Read article](https://lyrahosting.com/blog/streaming-server/)