In-House Data Center vs. Colocation Pros and Cons

Park Place Hardware Maintenance

Chris Adams Published: August 19, 2019

There comes a time when each organization must make—or re-make—a decision about its data center operations. The cloud has offered many new options for moving IT capabilities off premises. Still, many IT leaders prefer to retain direct control of an organization’s most valued assets. If ownership is the goal, is it better to maintain a data center or is colocation a viable option? Let’s take a look at the pros and cons.

In-House Data Center or Server Room

Debates between traditional data centers and virtualization have been prevalent recently due to the benefits each can provide. Using a physical server vs. virtual server can provide processing benefits and more.

Pros of On-Premise

  • It’s all yours, to modify and expand as you see fit.
  • Hardware is on site, allowing staff convenient access for maintenance and troubleshooting.
  • Security and uptime are the full responsibility of the IT department, enabling tailored measures.
  • In-house data centers provide full data access control appropriate for organizations with strict regulatory requirements.
  • There are no changeable licensing costs or SLAs to worry about.

Cons of On-Premise

  • The responsibilities for all aspects of infrastructure provisioning and management fall to in-house staff.
  • There may be construction costs, and operations costs can be higher than for colocations.
  • Redundancy and security can be more challenging, and disaster recovery needs to be considered.
  • In-house facilities can be a barrier to geographic expansion.


Some of the main benefits of colocation services are that shared facilities can reduce energy, connectivity, and other utility costs, as they are spread across multiple customers and procured at volume discounts.

Pros of Colocation

  • Shared facilities can reduce energy, connectivity, and other utility costs, as they are spread across multiple customers and procured at volume discounts.
  • Redundant internet and power connections are generally included.
  • Colocation providers may offer mirrored data centers for disaster recovery purposes.
  • Many colocation providers offer high-end physical security features, which could be difficult to afford at an in-house data center.

Cons of Colocation

  • IT equipment remains at some distance from the staff maintaining and troubleshooting it.
  • Initial set-up fees and licensing costs can be prohibitive, and the transition to colocation can be expensive and entails some risk.
  • The client may not be able to schedule maintenance downtimes, and physical access can vary.
  • Latency problems arise, depending on bandwidth between the company and colocation.
  • The company remains legally responsible for regulatory compliance, even if the vendor falls short.

The Bottom Line

Colocation providers vary in quality, and the contracts run the gamut in terms of services and cost. The existing investment in an on-site data center facility versus the costs associated with moving to a colocation can tip the decision.

What does not change is the need for a high-quality IT hardware maintenance solution. Park Place Technologies can provide robust support for a wide range of IT equipment, whether infrastructure managed services for equipment located at your facility or smart hands services for hardware housed in a colocation center, and we can even assist in the transition if you need us.

About the Author

Chris Adams, President and Chief Executive Officer
As President and CEO, he works side-by-side with other key leaders throughout the company managing day-to-day operations of Park Place. His key objectives include streamlining work processes and ensuring that all business initiatives and objectives are in sync. Chris focuses on key growth strategies and initiatives to improve profitability for Park Place, and is responsible for European and Asia-Pacific sales and service operations.