Colocation hosting means you own the servers and rent everything around them: rack space, power, cooling, security and network in someone else’s data center. The provider keeps the building running. You run the hardware and everything on it.
For servers you already own, it’s usually the cheapest way to run them properly. It’s often the wrong call if you’d have to buy new hardware just to colocate it, and I’ll show why below.
Looking for space now? Our server colocation services page compares our three sites: Ashburn (East), Chicago (Central) and Los Angeles (West). Chicago colocation starts at $99 a month for 1U plus a $100 setup fee; Los Angeles colocation and Ashburn colocation are quoted per deployment. Colocating Mac minis? See Mac mini colocation.
What is colocation, and what isn’t it?
There are three common ways to get a server into a real data center, and they split the work differently.
- Colocation: your hardware, the provider’s facility.
- Dedicated server: the provider’s hardware, rented to you by the month, in the provider’s facility.
- On-premises: your hardware in your own building, with your own power, cooling and internet.
Colocation sits in the middle. You keep full control of the machine, down to the BIOS and the drives, but you stop worrying about generators, air conditioning, fire suppression and carrier contracts.
| The provider handles | You handle |
|---|---|
| Space in a locking cabinet | Buying the servers |
| Redundant power and cooling | OS, apps and patching |
| Physical security, 24/7 staff | Monitoring your servers |
| Network uplink and IPs | Spare parts and failures |
How colocation works day to day
Before move-in. Make a list of every server with its model, its power draw under load and how many power supplies it has, because that list decides your package. Check that each server has rack rails, label both ends of every cable, and set up remote console access and test it while the box is still on your desk. The worst time to discover a dead management port is after it’s in a cabinet across the state.
Getting in. You pick a package, sized in rack units (1U is one standard server slot), ship or bring your hardware, and it goes into the cabinet. It gets power, a network uplink and a block of IP addresses.
Running it. From then on you work remotely, the same as with any server: SSH, RDP, your own out-of-band management. The provider’s job is making sure the power, cooling and network under your server never become your problem.
When something physical breaks. This is the big difference from renting. A dead drive in a dedicated server is the host’s problem; in colocation it’s yours. You either go to the data center yourself or use remote hands, where a technician on site reboots a box, swaps a drive you’ve shipped or reseats a cable while you watch the console. At GigeNET, every Chicago package includes free remote hands time, and extra time is $150 an hour.
Keeping spares. Because failed parts are your problem, it pays to keep a spare drive or two on site. Then a failed disk is a quick swap instead of a wait for a courier.
What you pay for
A colocation bill has a handful of lines: space, power, bandwidth, IP addresses, remote hands and a one-time setup fee, plus cross-connects if you bring your own carrier. Some providers bundle them into a package price and some itemize every one.
Power is the line to read first. It’s the scarce resource in any data center, and it’s where two quotes that look alike on space can end up far apart. Providers sell it either per kW or per package as a set number of amps and receptacles, which is how we do it. Either way, measure what your servers draw under load before you compare prices.
The full breakdown, with worked examples and other providers’ published prices, is in colocation pricing explained.
Colocation vs dedicated servers
The honest answer depends on one thing: what the hardware costs you.
We priced four servers both ways over 36 months in Chicago, using real rates, in our colocation vs dedicated server cost breakdown. Colocation beat renting only when the hardware was cheap, meaning you already own it or you buy it refurbished. With four new servers, colocation didn’t catch up with renting until month 53, well past a normal three-year refresh cycle.
So my take is this. If you have servers sitting in an office closet or a lease that’s ending, colocate them. If you’re starting from zero, rent dedicated servers and let the host carry the hardware risk.
There’s a middle path too. You can combine colocation and dedicated servers in one hybrid setup, which suits teams that own some gear but don’t want to buy every new box.
What to check before you pick a colocation provider
Most colo sales pages look the same. These are the questions that separate them.
- Power terms. How many amps, at what voltage, on how many receptacles, and is the power redundant (two independent circuits)?
- Staff on site. Are the provider’s own engineers in the building 24/7, or is after-hours support a contractor on call?
- Remote hands. How much is included, what does extra time cost, and how fast does someone respond at 3 a.m.?
- Network. Which carriers, and is there an uptime SLA in writing?
- Audits. Is the facility SOC 2 Type II certified, and will they share the report?
- Access. Can you get in yourself when you need to, and how much notice do they need?
- Room to grow. Can you move from 1U to a half or full rack without renumbering your IPs or changing facilities?
- Private networking. If you run more than one package, can your servers talk over a private network?
A provider that answers all eight without hedging is worth a closer look.
GigeNET’s Chicago colocation packages
We run colocation in our own 17,000 sq. ft. Chicago facility. It’s SOC 2 Type II certified, engineers are on site 24/7/365, and every package sits in a locking cabinet with redundant dual-circuit power. Here are today’s published prices from our Chicago colocation page:
| Package | Monthly | Setup |
|---|---|---|
| 1U, 1 Gb/s | $99 | $100 |
| 2U, 1 Gb/s | $199 | $200 |
| Half rack (20U) | $799 | $1,000 |
| Full rack (40U) | $1,400 | $1,500 |
Every package includes a /29 (8 IP addresses) and free remote hands: 1 hour on the smaller packages, 2 hours on the full rack. The half and full racks can take a 10G uplink, and the full rack comes with dual 20A 120V circuits.
Behind that: VESDA smoke detection with pre-action dry pipe suppression, redundant Liebert HVAC, dual Mitsubishi UPS with a Katolight generator, 150 watts per square foot of power density, five bandwidth providers on a route-optimized network, and a 99.5% network uptime SLA in writing. You can start at 1U and grow into a half or full rack without changing facilities, IP ranges or network configuration. Private networking between colocation packages is available, and remote hands beyond the included time is $150 an hour.
Not ready to order yet?
Tell us what you’re colocating, roughly how many rack units and what it draws, and we’ll email you a price. Rather talk it through? Call (800) 561-2656.
FAQ
No. Most day-to-day work happens remotely, and remote hands covers the physical jobs. Being within driving distance helps for the initial install and big hardware swaps, and that’s about it.
You do, because you own it. You can go on site yourself or have remote hands swap in a spare part you’ve shipped. If you’d rather hand hardware failures to someone else, a dedicated server is the better fit.
At GigeNET in Chicago, packages start at $99 a month for 1U with a $100 setup fee and go up to $1,400 a month for a full rack. What drives the price most anywhere is power, so compare quotes on amps and receptacles rather than on rack units alone.
Yes. We build hybrid setups that combine colocated hardware with rented dedicated servers, and we can add managed services and backups if you need them.
Want a colocation quote sized to your hardware? Tell us what you’re running and we’ll recommend a starting package with room to grow. To compare rack options first, see our server colocation services in Chicago, LA and Ashburn, or the colocation pricing breakdown.
