Skip to main content

Considerations for Data Center Colocation

By 2nd Dec 2020Feb 23rd, 2022No Comments

What is Colocation?

Colocation (n): service providers who offer pure space rental, including infrastructure support such as power, cooling and physical security to an organisation for its data computing and networking infrastructure (Frost & Sullivan, Jan 2012)

Companies are increasingly considering colocation services from a multi-tenant data centres an ideal solution for their IT infrastructure due to the escalating costs of building a private data centre as well as the versatility offered by commercial data centres. Modern data centres are gateways to the connectivity and digital services platform; offering businesses access to every digital service imaginable.

Colocation is no longer just about renting floor space. It offers organisations the ability to leverage data centres’ enhanced power and cooling capabilities to reduce ongoing infrastructure costs.

Demand for colocation services in Africa is being driven by improving connectivity levels and the rising volumes of intercontinental data traffic.

The IT Lifecycle 

We often think that small businesses have very different challenges to large corporates, and in many senses, that’s true.
However, when it comes to managing your IT infrastructure, each organisation, no matter what size, has its own specific needs as they move through the IT lifecycle of any organisation facing economic growth.

Small businesses, from start-up and through their initial hectic growth phases, rarely have time to forecast and plan ahead for the ideal IT capacity requirements. Often, with rental space at a premium and overheads under pressure, there isn’t enough space on your premises or your bottom line to accommodate the equipment you need or the cooling and electricity power you require to run an ever more intricate infrastructure. On top of that, your IT team will be increasingly worried about security and protecting your data and equipment from failure, or malicious attacks.

As a mid-sized business, your business has taken off. It’s flourishing. You have software applications that meet your customer and supplier needs and demand for your products and services has never been better. You can’t believe your good fortune. As you listen carefully to your customers clamouring for your attention, you hear the groans of your overworked IT infrastructure creaking as you turn up the heat expecting everything to work at maximum output, all day, every day.

You know you’re running out of space, the IT room looks like it might explode if you added one more server rack and the facilities manager is whining about soaring electricity bills. The risk of a disaster is bubbling on the edge – and you can’t shut down for a moment to catch your breath and cover your risks. Will you increase your rental bill, risk network outages or look at moving your entire operation?

Enterprises – gliding along elegantly with all the hardware, investment and resources required to run a serious outfit. The next step would be to invest in your own state of the art data centre facility, that would power your next growth phase, modernise your IT operations and be a long term investment into the organisation’s future that will impress shareholders and clients alike.

But you and your Board are worried about ROI and you’re batting off questions that call for monthly operating expenses, utilities and hardware, and the intricacies of designing raised floors, UPS requirements and backup generators not to mention the technical expertise you need to build the actual facility.

Whether you are starting out small, moving to medium or easing into the enterprise, a colocation provider that can meet your needs might be the solution for you.

Benefits of Colocation 

By placing some or all of your IT assets in a service provider’s facility (adjacent to or “co-located with” the assets of other organisations) you gain the advantage of shared power infrastructure, cooling, security and redundant architecture. By renting space for your IT assets, but keeping ownership and control, you can expand quickly and still maintain the stringent quality, redundancy and security requirements of your ideal IT infrastructure, whilst taking IT expansion costs off the balance sheet and saving on precious capital expenditure.

You should consider Colocation when:

If your organisation operates across a vast geography, whether provincial, national or continental, you may require a well-situated central location for your data centre and connectivity requirements.

Necessary Requirements
Your current location may not be able to meet the cooling, power or weight requirements for your own data centre, and it’s extremely expensive to retrofit older premises. Often, it’s not possible to provide the kind of security and fire protection required within these older buildings as well.

Space alternative
Colocation provides an alternative to expanding or building when you have outgrown your current space but don’t want to relocate everything into new facilities.

Learn more about Colocation Services – Weighing up the Benefits

Business Benefits of Making a Colocation Move


Improved reliability and availability is underpinned by the Service Level Agreement (SLA) from the service provider (usually 99.999%) as well as high internet bandwidth availability. The ability to provide reliable and redundant power is critical to business uptime. Good colocation providers offer uptime guarantees on power and will pay down to the minute as stated in their SLA. Where every second of downtime can cost fortunes, reliability is often a compelling reason to use colocation facilities.


Raised floors that deliver cool air and building designs that deflect natural heat are all part of the performance-enhanced designs required for data centre facilities.
Constant environmental monitoring and temperature stability ensure that every piece of equipment runs optimally, backed by 24/7 monitoring and control as well as remote access and support.
Where carrier-neutral IP connectivity is offered within a colocation facility, end-user experiences can all be greatly enhanced through less latency.


Financially, colocation makes sense. There is a reduced capital investment and lower lifetime cost as non-core expenditure is eliminated from the company balance sheet and setup and monthly costs are significantly lowered.


Businesses in collocated data centres have the added advanced of having ample room to grow either in space or in higher density requirements. Adding cabinets, power requirements or changing configurations is far easier and quicker in a colocated facility, ensuring an IT infrastructure can quickly adapt and grow with market shifts and demands.

Risk and Compliance

Colocation removes risk from the discussion – quality colocation facilities meet strict compliance and certification requirements. Their security features include highly controlled access, on-site security, video surveillance and even biometric access to protect customer equipment and data. Colocation providers also have to ensure that they comply with regulatory requirements, saving customers time and money and making audits far easier.


Is Colocation the Right Fit For Your Business?

Now that you are aware of the business benefits, you might be wondering how you could determine if colocation would be the right fit for your company’s IT infrastructure requirements.

Are you able to give up some control over your IT facilities or IT assets?

If you answer yes here… it’s likely that some or all of the following questions will help you decide whether colocation or another service like managed hosting is best for you.

If your answer is “no,” you need to have a willingness within the company to accept the potential benefits and other services that colocation can offer, but none of this can be capitalised on unless your company is able to transfer the responsibility of some or all of your IT asset management.

Do you own or have all of the IT hardware needed to grow your business?

If you have what you need, you could benefit from a physical facility that offers space, power, redundancy and security under a more cost-effective structure. You could also consider the saving you might make from redeploying IT support and management personnel.

If your company is growing or continues to grow, do you have access to or a willingness to devote investment into additional IT assets?

Even if your answer here is “no,” it’s possible that colocation could be a good short term option for you. However, further down the line, you may want to re-evaluate your requirements. Managed hosting is an alternative option whereby the service provider acquires your hardware, and you enter into a rental model on hardware and facilities together, moving all costs to monthly operating expenses and requiring no capital expenditure at all.

Colocation Facilities in South Africa, Asking The Right Questions

♳ Scalability
A colocation facility should be able to scale efficiently and on-demand, either with a higher density configuration or incremental cabinet space. Make sure you go to a provider that is growing and will continue to grow ahead of market demand. Changing demands will require that you look to a better return on investment from your commitment as your needs evolve. Just as an aside, leading data centres now offer power capacities in excess of 6kW per rack! Look for facilities that are implementing new design elements, integrating tried and tested methodologies and technologies and that can increase power and cooling demands as higher density rack requirements grow.

♴ Resiliency & Redundancy
Be sure to question your potential colocation supplier on their resiliency. Leading suppliers should have an N+1 design, meaning they have enough to meet your requirements plus one additional for redundancy in power and cooling infrastructure, ultimately bring you maximum system uptime. Check on their SLA, ensuring it is clearly performance-oriented and seek out providers who guarantee at least 99.999% uptime. You should also ensure that there are penalties in place for any downtime and that the provider will offer credits or payback to you should they experience downtime outside of their SLA.

♵ Safety & Security
When you trust someone with your business-critical data and IT infrastructure, you would expect the best possible security for the facilities you choose. This spans every aspect of security, from physical guarding and access control to biometric or card readers, digital camera surveillance and keypads or electronic locks. In addition, there should be standards for their monitoring of equipment, particularly for fire and safety hazards, mechanical failure and equipment performance.

♶ 24/7/365 Support
Round the clock support, staffed by able technicians who can be directly contacted through email or telephone differentiates many of the top colocation providers. Automated email ticketing systems are often frustrating when you want to resolve a mission-critical downtime incident. When you view the colocation facilities you are considering, speak to the engineers themselves and question them on typical incidents that might occur and judge their answers carefully as though they were an extension of your own IT support team. Ask them for customer references and find out whether there have been any customer complaints or cancellations recently.

♷ Carrier Access
Latency is an often discussed and much-mooted reason for not moving to colocated facilities. It’s important to check that you find a facility which houses as many of the network carriers as possible. Network performance (or latency) can have a direct financial and productivity impact on your business, particularly if you are on a slow network. Look for providers with high-speed connections to multiple carriers and ensure that there is failover between high-speed Internet access providers within the facility that you are being offered. Question your potential provider on how they optimise bandwidth within the facility and how they route traffic to keep network speeds and continuous connectivity.

♸ Pleasant Environment
Be sure to visit the actual facility. Your technicians and staff maybe spend some time-on-site and will want to be in a clean, comfortable, well-lit environment in a safe area that offers an ideal work environment. Many colocation facilities provide customer hospitality and meeting areas, as well as network access, workspaces and of course staging areas for you to access your equipment properly.

Read more about 9 Data Centre Trends Driving Transformation in Africa.

Teraco Colocation

Teraco is the first provider of resilient, vendor-neutral data environments in South Africa. Clients benefit from the cost savings and improved resilience of securely housing their information systems and networking equipment in a colocation facility purpose-built and operated to global best practice by an expert organisation with an absolute focus on data centre technology and infrastructure.

Teraco is a Level 2 contributor (DTI Codes) and was founded in 2007. The company is backed by leading international investors including the IFC (International Finance Corporation), the DBSA (Development Bank of South Africa) and Treacle Private Equity, a black-owned South African private equity group.

Teraco Data Environments operates premium data centre colocation facilities in Rondebosch, Cape Town (CT1), Riverhorse Valley, Durban (DB1) and in Isando, Johannesburg (JB1). Teraco data centres are located on the fibre rings of all the major licensed carriers in South Africa.