What is Colocation?

Colocation hosting (sometimes referred to as simply “colo”) is a service where a business drops off or ships servers to a provider such as ServerMania and the provider racks the servers in its secure data center and connects the server to power and networking. For one monthly price, colocation hosting provides businesses with a secure location that is climate controlled, guarded by security officers 24×7, and staffed with technicians to perform any physical server activities required (remote hands). These facilities feature redundant power, networking, and cooling to ensure the most reliable server hosting experience.

Renting vs. Colocating A Server

There are benefits for both renting and colocating a server. Here are just a few:


  • No up-front server hardware cost
  • No hardware replacement costs
  • Access to 24×7 technical support
  • Upgrade to a new server at any time without paying for new hardware


  • Access to more customized hardware
  • Configure your own private networks and custom network configurations
  • House servers in isolated racks with no other user access
  • Invest in physical servers as a company asset


Depending on the specific hardware requirements of the business, some organizations may prefer to invest the time and money to purchase server hardware and colocate servers. For other businesses, the pricing of renting a server may make more sense if they don’t have unique hardware requirements or may need to upgrade servers frequently.

See Also: (On Demand) Meet ServerMania: Transform Your Server Hosting Experience

What Applications Are Best Suited For Colocation?

Custom Hardware Requirements

For businesses that have unique server and network requirements, colocation offers the greatest control in building the exact server required for the project. When comparing colocation pricing to a dedicated server rental, it may be cheaper to colocate the server when the hardware needs are very unique.

Focus On Hardware Investment

Certain businesses may find that it makes the most economic sense from a cashflow perspective to invest resources in server hardware.

Large Scale Deployments

Projects requiring dozens or hundreds of servers for an application may find it easier and more financially viable to invest in the hardware rather than renting a server.

How Much Does Server Colocation Cost?

Server colocation pricing is very application specific and ranges from $79/month for a single server to $599/month for a 42U rack. The colocation pricing will vary depending on the amount of units, data center location, power, and bandwidth required so we recommend requesting a quote to get an exact price for your needs.

When preparing a quote for colocation or managed colocation, the following factors will be considered:

Data Center Rack Space Units

One of the primary elements of colocation cost is the number of rack units needed in one of our data centers. Colocation space is typically one of the larger expenses in the bill. Unlike traditional desktop computers, servers stored in a data center are created using a rack mountable case. This helps to increase the number of servers that can be hosted in the data center as well as optimize for power and cooling distribution.

This picture shows a variety of server sizes in a data centers room. The second rack from the left is filled primary with 1U or “one unit” servers. This rack also has several 2U and 4U servers and switches.

The typical server is 1U or 2U, which means that it takes up one or two rack units. But larger storage servers or older servers may be larger and take up 4U. The colocation server space costs will therefore vary depending on the number of servers you wish to host in the data center along with the number of rack units each requires.

Colocaiton is typically priced either per unit, a half rack or a full rack and would be charged per rack.

Power Costs

The amount of power that each server requires in one of our data centers is another cost consideration when reviewing colocation prices. Energy is billed monthly based on the number of power drops required to the rack along with the number of amps required for the cabinet. When choosing a power configuration, careful consideration should be given to current and future forecasted power consumption.

Some of the common electrical configurations we offer include 20amp/120V and 30amp/230V. Maximum wattage that a rack can carry will vary depending on the electrical feeds being supplied to the cabinet and various other factors. Depending on the installed equipment a typical rack’s wattage will range from 2-3 kW.

Bandwidth and IP Addresses

The amount of monthly network transfer required from the internet service provider for all colocation servers as well as any public IP addresses needed will be considered when preparing a colo pricing quote. Typically, there will be dual 1Gbps network connections delivered to each rack-mounted server and monthly bandwidth will be billed at the 95th percentile in Mbps.

Also called “burstable billing”, 95th percentile billing allows for a server to be billed based on the average bandwidth usage for 95% of the month. During the other 5% of the month, the server may exceed the average without suffering any additional costs.

Remote Hands

Modern servers are usually equipped with a KVM / IPMI console which allows remote system admins to monitor system activity, manage power, and reboot the server. If there is any hardware failure or another reason why a technician needs to physically perform work on a server, there is an hourly fee for remote hands technicians to work on the server in the colocation data center. Each of our colocation services can be upgraded to include remote hands support per month.

How to Colocate A Server


Compile a list of servers that you wish to colocate including their unit size and power requirements.


Contact us to request a colocation pricing quote to receive the exact colocation costs and monthly fee for your project.


Prepare the servers for shipment and ship the servers to the ServerMania Buffalo Data Center or ServerMania Montreal Colocation Data Center. As a trusted colocation provider, we also have colocation available in New York Metro, London, and Los Angeles.


Once the servers have been processed and racked by colocation providers, you will receive IP address information for your servers.

Request Your Free Colocation Quote Today

Due to the unique nature of colocation, we recommend requesting a quote to receive precise pricing information for your project.