Colocation: Owning your own web server

What is colocation?

Colocation is a service offered by web hosting providers where you own your own web server hardware, but it is actually located and connected to the internet backbone at a remote location.

With colocation, you have complete control over your server, and you aren't bound by a web hosting company's policies about what can and cannot be placed on it.

You can run pretty much any software or CGI scripts you need without having to worry about having your hosting account canceled for degrading the server's performance or negatively impacting other websites.

If you decide that colocation is a viable option for you, you have two choices:

Purchase your server yourself and have it shipped it to the web hosting company.
Pay the hosting provider to build your server for you according to your specifications.

The advantages of colocation include:

You own the server, which means you have absolute control over what combination of hardware and software is used.
You get a high speed connection to the internet backbone for your server without having to bear the high overhead costs involved with getting one yourself.
You can modify, upgrade, or replace your server hardware and/or software at any time.

The disadvantages of colocation are:

You own the server, which means if it fails, you're responsible for repairing it.
The startup costs for colocation are higher than those for a dedicated server because you must purchase the server hardware and software that you plan to use.
You're responsible for operating and maintaining your server, not the hosting company. You'll have to install and configure the operating system, software, and scripts, as well as perform backups, etc.

Of course you have the option of hiring an assistant to perform all of these tasks for you, but the fees involved are typically quite high.

Conclusion

With colocation, you have absolute control over your server hardware and software, which allows you to operate your business as you wish.

But due to the high up-front costs and the skills required, colocation certainly isn't for everyone. You should carefully consider the advantages and disadvantages detailed above before you decide whether you should opt for colocation or a dedicated server.