Colocation Data Center ODATA

Colocation Data Center: understand how this service supports your business growth

9 minutes reading

Resilience and security are two factors that are gaining prominence in the corporate universe, especially when it comes to the IT sector. And in this sense, the Colocation Data Center is a service that precisely supports the implementation of a robust and efficient data infrastructure.

While, in the past, companies depended on a Data Center physically installed in their offices, today, this equipment can be allocated in independent buildings managed by specialized providers. At the same time, companies starting to compose their IT skeleton can also benefit from this alternative, creating an architecture suited to their needs.

However, to choose the best strategy for your business, you must first understand the service itself and the advantages it offers. For this matter, in this article, we explain:

  • What is Colocation
  • How the Colocation Data Center works
  • The difference between Colocation and other Data Center models
  • Benefits that the solution brings to organizations from different sectors

Keep reading and discover more.

What is Colocation?

Colocation, co-location or housing: although it can be called (or written) in different ways, it basically consists of renting physical space for hosting the machinery needed to maintain a data infrastructure. In some locations, such as Brazil and other Latin American countries, the term Colocation is the most used; in others, such as Germany, Spain, and Portugal, Housing is the most common terminology.

Thus, in general, the concept deals with the allocation of hardware, such as private servers and network equipment, in a dedicated and outsourced building. In other words, it consists of taking these machines out of the office (a model known as a Traditional Data Center or On-premise) and installing them in a rented space entirely dedicated to this purpose.

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So, what is a Colocation Data Center?

Therefore, a Colocation Data Center (which can also be called Colocation Center or even ‘carrier hotel’) is a building designed, built and maintained independently by a specialized provider – such as ODATA, for example -exclusively to perform the function of a Data Processing Center.

In this way, companies of all sizes and sectors can contract, as a service, the hosting of multiple servers, in different ways, which meet the specific needs of each organization. For this purpose, the Colocation Data Center offers essential resources for the equipment to function properly, such as racks, cabinets, cages or entire rooms, depending on demand.

In the Colocation building, an entire infrastructure is natively prepared to receive the clients’ servers, which includes cleaning service, and cooling systems, to avoid overheating. Along with the facilities, they use data storage devices and the network bandwidth available in the Data Center, interconnecting with several telecommunications providers and other network services.

In addition, the Colocation Data Center also features multiple high-end connectivity and security options, as well as a redundant power supply. Elements that, to be kept in the office, represent high monthly costs for the operation.

This solution usually has an IT support team available 24×7 for maintenance, upgrades and problem prevention.

READ HERE: Understand why Data Centers need renewable energy

Colocation Data Center Provider and Contractor Responsibilities

Although it may vary according to the contracted service, in general terms, the Colocation service provider is responsible for providing the infrastructure and the customer for the hardware.

For example, while the equipment is allocated in monitored environments and with constant maintenance, if there are problems with the parts themselves, the responsibility for repair or replacement is within the contractor’s scope.

On the other hand, ensuring that these devices are correctly connected to energy sources and the internet network, as well as protecting them from access by unauthorized persons, is the responsibility of the Colocation Data Center service provider.

Today, with the expansion of services, Managed Colocation solutions already exist. In this case, in addition to the amenities already mentioned, there are specialized professionals who can take care of the server and existing applications.

Colocation Data Center: growth trend until 2025

Undeniably, the adoption of Colocation by organizations of all sizes is on the rise, whether due to the growing number of users adhering to remote work, the implementation of 5G, which demands more robust and stable network structures, or the progressive awareness of managers and end users to the importance of carbon footprint reduction.

Additionally, the growing need to expand, move or consolidate Data Centers to keep up with this scenario encourages technology managers to adhere to Colocation services, aiming to reduce costs and increase reliability and operational security.

And the speed with which this infrastructure must be migrated or deployed is becoming as important as getting it into the right environment. This is the idea behind the concept of ‘just-in-time infrastructure’, listed by Gartner as one of the main trends for 2022. In this sense, the Colocation Data Center stands out as one of the most suitable options.

Furthermore, the requirement for a reliable, secure and scalable Data Center is the main driving force driving the global market. According to the Market Research Engine consultancy, the Colocation Data Center industry is estimated to reach $92 billion by 2025 at a compound annual growth rate (CAGR) of 14.5%.

Colocation, Hosting and Cloud: what are the differences?

With the acceleration of digital evolution and the changes it has been causing in business models, it is good to be aware of the different technologies available to compose the base infrastructure. Therefore, in addition to Colocation, we explain below two other services that are currently widely used and that, integrated, make up modern hybrid architectures:


The hosting service is very close to Colocation. So, as an example, it also consists of using an outsourced Data Center. However, in this model, the customer does not supply the hardware but hires it with software licenses, environment management and specialized services.

It is also worth adding that if the contracted service is Dedicated Hosting, together with other amenities, resources are not shared with other customers.

This solution, in general, is widely used by entrepreneurs, as it does not depend on the company’s acquisition of a server and equipment. At the same time, it also leaves more responsibilities in the hands of the provider since it controls and manages the entire structure.

Both Dedicated Hosting and Colocation offer advantages, such as dedicating resources to the client. However, in the first one, which covers the hardware layer and the IT structure, the monthly cost of the operation can be higher.


Cloud Computing environments offer infrastructure, as well as other alternatives, which are contracted as a service. However, they do so through the cloud rather than relying on physical assets. These facilities are shared in the public cloud model, as in Colocation, which provides cost savings. In the private cloud, there is exclusivity, but at a higher price.

In this type of Data Center service, the provider manages the servers, storage and network elements. Despite this aspect, to keep up with the growth of the cloud business, buying more virtual space for storage may be necessary, which would eventually drive up prices.

READ HERE: Why Colocation is critical to the future of Hybrid Cloud

What is the best Data Center model?

In summary, the Data Center models can be differentiated as follows:

  • On-Premise: the company constructs the building, usually installed on the company’s premises. It also acquires the equipment and is responsible for the installation and maintenance of the entire architecture;
  • Colocation: the company supplies hardware, and the provider takes care of the entire infrastructure with a space ideally designed to receive the equipment;
  • Hosting: the client is responsible for the application layer; the outsourced Data Center service provider manages all other services;
  • Cloud: the contractor pays for the capacity used; the provider offers virtual management of servers, storage and network elements.

In other words, investing in a hybrid architecture may be the best way to take advantage of the best benefits of each of the modalities.

LEARN MORE: Wholesale Data Center: understand the model and the benefits for your business

Discover the benefits of Colocation for business

Even with the rise of digitization, the reality is that many large organizations still prefer to maintain their own server. Thus, the Colocation Data Center appears as an ideal solution to keep this structure in perfect condition to foster business growth.

Among the main benefits of the service, we can highlight the following:

  • Connectivity: offers higher levels of bandwidth. Hosting the data hardware in a Colocation Data Center gives companies access to more stable, faster and better quality connectivity service compared to a typical office server room at an appropriate cost;
  • Control: the customer maintains the use of their own equipment in the same way as it was internally;
  • Economy: reduces expenses related to the construction, maintenance and updating of a traditional Data Center;
  • Scalability: renting more space in a colocation facility is less expensive than building or expanding a Data Center;
  • Redundancy: offer more excellent protection against power outages since they have several existing data backups and redundant electricity supply sources;
  • Security: the Colocation Data Center has strict physical security protocols in conjunction with offering cyber protection.

READ MORE: Why Data Center outsourcing can improve your company’s sustainability rates

ODATA Data Centers

Originally from Brazil, ODATA is one of the most recognized Data Center service providers, dedicated to providing scalable, reliable and flexible IT infrastructure in Latin America.

As a specialist in Colocation services, ODATA has been helping organizations in different stages of digital maturity to develop a technological structure prepared for the future.

For this, its team of specialists is always ready to provide a dedicated and secure environment, with redundant power, cooling and tailor-made ultra-connectivity, according to the needs of each organization.

Accordingly, ODATA customers have total availability in their Data Centers, which helps them to boost business productivity. Its Colocation solutions range from high-power-density half-rack cages for smaller environments to wholesale.


As we have seen, it is necessary to maintain an Information Technology structure capable of supporting all demands to ensure business continuity and compose a resilient operation. More than that, it should support all processes, helping the company’s growth instead of being a barrier.

In this account, companies are increasingly implementing new technologies, such as connected devices from the Internet of Things (IoT), Big Data or Artificial Intelligence solutions. These innovations, significant to the data era we are living in, will consequently increase the volume of information generated and captured.

Likewise, the spread of 5G connections will also affect this business area, increasing the potential of resources already used today.

As a result, it is undeniable that there will be greater demand for data processing and storage. For this reason, the Colocation Data Center must be even more present in corporate strategies.

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