Data center colocation facilities are outsourced data centers that a business uses to augment its own computing capacity. Data center colocation is often a core element of a company’s multi-faceted infrastructure strategy to leverage the optimal amount of resources for its computing needs.
Given the exponentially increasing volumes of data that companies collect and store, the data center colocation market is predicted to grow at a compound annual growth rate of 13.3% between 2021 and 2028.
This guide will help you choose a data center colocation company. Below is a list of the top choices; continue to scroll down for still more data center colocation resources.
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Top 7 Data Center Colocation Companies
The colocation market has seen increasing consolidation within the last couple of years, so expect the vendors below to change in terms of name, leadership, or both.
|Data Centers||Best for|
|China Telecom||mid to large enterprises with a presence in Asia, especially China|
|CoreSite||enterprises with a presence in the US|
|CyrusOne||companies looking for specialized colocation services|
|Cyxtera||companies of any size that seek an affordable yet reliable option|
|Digital Realty||larger organization based in the US that also have international markets|
|Equinix||large companies needing specialized services|
|NTT Global Data Centers||businesses of any size looking for a flexible modular approach to data center colocation services|
Best for: mid- to large-sized enterprises with a presence in Asia, especially China.
China Telecom is among China’s largest data center providers with data centers around the world, including the Americas and Europe.
China Telecom provides flexible and customizable data center architecture to fit customer needs. It offers integrated data center services to customers around the world through its vast network of data center facilities (more than 360). China Telecom also provides customized hosting services and global disaster recovery services.
Its integrated data centers are connected to a broad range of private and public data circuits around the world. 20 of their data centers are Tier IV, and 90+ are Tier II with diversified network connections on every continent. All Tier IV data centers are outfitted with high density power and cooling infrastructures.
Customers can rest assured that their data assets and hardware is secure, as China Telecom’s security features include anti-virus scans, DDoS protection, firewall management, and intrusion detection. It also supports HIPAA, ISAE, 3402, and PCI-DSS compliance, though competitors tend to cover more compliance measures.
China Telecom also takes measures to ensure that all of its data centers are running sustainably with green operational policies.
Read more: Data Center Sustainability: 5 Steps to a Green Data Center
Best for: for enterprises seeking country-wide services in the US.
CoreSite provides secure, reliable, and high-performance data solutions through its 27 US data centers. Each center keeps its customers’ markets connected with more than 32,000 connections in ten major metropolitan areas, including Boston, Chicago, Silicon Valley, and as of recently, Atlanta and Orlando.
Each site in CoreSite’s geographically distributed portfolio is connected through high-count dark fiber, which allows for scalable growth and access among multiple markets at once. Select sites in CoreSite’s portfolio have inter-site connectivity that allows customers to access as many providers as they need in an interconnection-dense facility or carrier hotel.
In areas where CoreSite has a singular data center, it offers common-carrier access to other regional interconnection hubs. In fact, CoreSite has more than 450 domestic and international carriers and access to more than 40 intercontinental cables. This makes it easy and cost-effective for CoreSite customers to link their deployment at a CoreSite data center to one at another data center in the region.
CoreSite offers top internet exchanges like AMS-IX, DE-CIX, and LINX, to name a few, but it also features its own Any2Exchange for internet peering. Having a variety of internet network connectivity options keeps costs down and connections up for CoreSite customers.
Best for: companies of any size looking for specialized colocation services in Europe and the Americas.
For companies who want data center colocation without committing to a suite of other services, CyrusOne is worth considering. CyrusOne specializes in colocation with more than 50 data centers across Europe, North America, and South America. It offers highly scalable data center solutions to grow with a business’s data needs, enabling clients to simplify and modernize their data infrastructure for long-term stability and sustainability.
CyrusOne’s services are highly flexible and scalable. This vendor supports mixed deployment models, including connectivity to private and public clouds, hybrid-cloud, and multi-cloud environments. Customers can:
- Choose their own managed service providers (MSPs).
- Tailor their desired redundancy according to rack level and application needs.
- Flexibly manage their contracts, choosing to ramp up or tamp down power and space over a specific time period.
CyrusOne provides design architectures that support flexible power requirements (2N, N, or both) and rack power densities that range from 250 watts per square foot up to 900 watts per square foot.
This vendor’s facilities are designed to comply with rigorous standards, such as ISO 27001, HIPP, SOC 1, and SOC 2, and TRUSTe to ensure protection of customers’ critical data.
In addition to compliance measures, CyrusOne also takes sustainability seriously. In May 2022, it joined the Infrastructure Masons Climate Accord, which is a coalition that strives to reduce the carbon footprint of digital infrastructure.
Best for: companies of any size that seek an affordable yet reliable option.
Cyxtera offers colocation solutions that scale up or down to meet the needs of any size businesses. Its 60+ data centers are carrier and cloud-neutral, which gives growing organizations more flexibility.
Cyxtera runs data centers in more than 28 different markets across North America, Europe, and Asia. Its leasing options for colocation include:
- Rack space
- Private suites
Cyxtera’s customizable cage solutions feature multi-layered security and access to multiple network and service providers in Cyxtera’s ecosystem. In addition, the vendor’s secure dedicated locking cabinets provide 2-8 kilowatts of power and can be tailored to meet client needs.
Cyxtera features SmartCabs, which are single-tenant colocation cabinets that are equipped with built-in power, network connectivity, and Cyxtera’s configurable core network fabric—the Digital Exchange.
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With Cyxtera, clients have the option of handling their own server management or choosing from a tiered support subscription model with options for everyday maintenance.
Cyxtera is the only vendor covered here that offers not only data center colocation and cloud services, but also AI and ML compute as a service. This service enables customers to deploy and provision AI/ML-powered workloads with greater agility and speed.
Best for: larger organizations based in the US that also have international markets.
Digital Realty is a market leader in the colocation, interconnection, and hybrid cloud infrastructure markets with more than 290 data centers that cover 50 markets across six continents. Most of its data center operations are housed in the US and Europe.
Digital Reality offers a variety of housing options:
- Private suites
This vendor’s data colocation solutions are designed to secure clients’ mission-critical data and keep customers connected to its ecosystem through a singular, open platform. It boasts a ten-year record of 99.999% uptime—also known as “5 nines availability.”
Smaller organizations should beware that Digital Realty does not offer rack lease spacing. It’s therefore a better fit for larger organizations that seek flexible network connectivity, a variety of bandwidth options, or support for a hybrid cloud model.
Best for: large enterprises seeking specialized hardware and software services.
Equinix is one of the major players in the data center industry that has acquired smaller businesses to strengthen its market share.
Equinix provides clients with a full portfolio of interconnection and integrated infrastructure services that include:
- Private suites
- Customized private cages
- Custom cabinet set-ups
Equinix has over 220 carrier-neutral data centers in 63 metropolitan areas and in six different continents. Its specialized Equinix Infrastructure Services include:
- Hardware supply, such as cages, cabinets, cable management equipment, and more.
- Equinix’s team of knowledgeable professionals for deployment expansion.
- Fast, robust migration processes that ensure high availability and low risk.
Read more: Data Center Migration: 7 Best Practices
Equinix is quite comparable to Digital Realty, as they both target large enterprises and do not offer leased rack spaces. These characteristics make them both unsuitable for smaller to medium-sized businesses. Equinix’s data center location coverage is somewhat smaller than Digital Realty, but Equinix extends its services beyond its own data center walls by giving access to its broader ecosystems of partners and providers. Check the exact data center locations of both to determine which vendor better aligns with your business needs.
NTT Global Data Centers
Best for: businesses of any size looking for a flexible modular approach to data center colocation services.
As one of the largest data center vendors in the world and especially in Asia, NTT Global Data Centers serves large enterprises with its expansive network of more than 160 data centers in more than 20 countries.
NTT offers racks, secure cabinets, custom-built cages and wholesale colocation solutions, private vaults and suites for extra security, and build-to-suit data centers.
As a major contender with Equinix and Digital Realty, this vendor keeps smaller organizations in mind as well with the ability to lease rack space. NTT claims to offer compliant data center services, though the website does not list its certifications.
NTT has end-to-end capabilities—from data center design to implementation—and scalable services to meet the high-demand hyperscale companies. Its data center locations operate in Africa, Asia, Australia, Europe, and North America (US only) but not in South America or the Middle East.
Common Features of Data Center Colocation Providers
A company stores leased servers or its own at a provider’s physical location, while the provider offers the following:
- Network connections
- Internet exchanges
- Back-up power sources
- Cooling facilities
- Physical offices
- Maintenance and support
- Multiple data center locations
- Wholesale colocation
- Retail colocation
- Cabinet colocation
- Cage colocation
- Private data center suites
- Hybrid, cloud-based colocation
- Tier III and IV level data centers that signal robustness
Read more: Data Center Technology Trends for 2022
Types of Data Center Colocation Facilities
A company can choose from four different kinds of colocation: retail, wholesale, hosting, and hybrid.
Retail colocation means that company shares the data center environment with other customers leasing a rack, space within a rack, or an entire cabinet.
Leases for this option tend to be short term—around one year—so it’s a good temporary solution for companies who need a carry-over data center until they build their own, for example.
Retail colocation facilities offer various carrier and connectivity options to cater to the needs of different companies. Though customers bring their own servers to the leased data center space, they relinquish control over the data center design and operation, leaving it up to the provider.
Wholesale colocation refers to a dedicated data center that is contained within a broader data center colocation facility. One customer leases an entire data center in the facility, usually over a period of three years.
Wholesale colocation facilities generally offer strong redundancy to keep data centers running in spite of outages, natural disasters, or other disturbances. Customers also have more control in wholesale colocation, as they can bring their own servers and also provide input for the data center design, layout, and management.
However, wholesale colocation centers are not as carrier-agnostic as the retail colocation option.
With this option, the vendor owns and manages the server, but the customer might have some visibility into server management. This makes the hosting option the least attractive option in terms of customer control and flexibility, yet it meets the price point for smaller companies that do not have the upfront costs to secure their own equipment.
Hybrid cloud-based colocation
These kinds of facilities blend the physical data center with cloud services. All vendors here offer this as an option to meet the diverse infrastructural needs of today’s organizations.
The vendors here do not specify which kinds of colocation they offer, but many likely offer all that can be combined with one another for ultimate flexibility.
Benefits of Data Center Colocation
There are plenty of reasons why a company may choose colocation over building its own data center.
Cost: A company saves in two ways by foregoing the costs of building its own data center and having costs fixed in the contract with the provider.
Interconnection: Carrier-neutral colocation centers are like a hub for networks, cloud service providers, and IT service providers, allowing businesses whose servers are housed within the same data center to leverage these connections.
Maintenance: Since the provider owns the data center, it takes care of cooling, power, and network connections.
Reliability: Outsourced data centers typically have state-of-the-art infrastructure to meet the computing needs of today’s businesses in addition to compliance certification, disaster recovery protocols, power consumption, management, low-latency networking, and multi-layered security measures.
Scalability: Since business’s data needs and strategies evolve, colocation providers offer flexible and scalable data center solutions with a variety of cabinet and cage sizes as well as various power configurations.
Security: Data center colocation facilities have strong security measures in place for hardware and software to complement customer’s own measures. Providers usually lock racks and employ 24/7 security guards.
Support: Data center colocation providers have knowledgeable staff for round-the-clock support.
Who Are Data Center Colocation Facilities For?
Data center colocation is a great way to free up resources by outsourcing data center operations.
It is financially advantageous especially for small to medium sized businesses who have not yet shored up the finances to build their own data center, because they can write off the operational expense of data colocation as a tax reduction measure.
However, if the operational expense of data center colocation exceeds the annual depreciation expense of a capital expenditure and if the organization has cash flow to support the investment, on-premise is the better option. This is usually the case for enterprises with bigger budgets.
Yet larger businesses do not typically put all their computing needs in one basket. They usually have the financial and infrastructural flexibility to combine on-prem, cloud, colocation services, and more.
Data center colocation is really for any company pursuing a diverse infrastructure strategy.
Larger enterprises, for example, want more servers in more locations. In this case, China Telecom, Digital Realty, Equinix, and NTT are the best bet in providing the coverage that enterprises need.
Smaller to medium-sized businesses should turn first to CoreSite, CyrusOne, Cyxtera, and even NTT for scalable data center colocation solutions.
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