Colocation vs. Managed Hosting: Which Is Right for Your Business?


So your company is finally making the jump to the cloud. Tens of thousands of companies across the nation and world can’t be wrong, can they? Now to sit back, relax, and …

… wait a minute! You’re not finished yet. There are still a few more decisions to be made. One big one? What kind of hosting solution is right for your business. You see, there’s more to it than just “in the cloud” and “not in the cloud.” Once you’ve decided to host your computing infrastructure off site, you still need to figure out how. Your main choices here are shared hosting, managed hosting or colocation.

Shared Hosting

This is the most economical choice, but the one with the lowest amount of control and the biggest drawbacks. With shared hosting, you and a bunch of other users and websites (other companies, personal websites, etc.) all share space on a single web server. While it might be sufficient for very basic sites with only a few basic pages and low traffic, the vast majority of businesses are going to need something more.

With shared hosting, you generally have almost no control over system administration or software. They’re also more difficult to secure since the same digital certificate must be shared by all websites hosted on the shared server. And they’re more prone to downtime, slowdown, and stress under heavy traffic load—if Tom’s Cat Videos Dot Com is on your server and goes viral, it can crash your system, too.

Managed Hosting

Also known as dedicated hosting service, this is really the first serious option for the vast majority of businesses. Under this setup, your company leases an entire server from the hosting provider—you don’t have to share it with anyone else. The service provider still maintains all the hardware, operating systems, and system software, and are typically responsible for setup, configuration, tech support, and the like. At the same time, you have greater control over the type or class of hardware and software you lease, and even how the server functions to some extent. Generally speaking, you will have administrative access as well.

Managed hosting tends to be a good choice for a lot of small to mid-sized companies. You can expect higher performance and reliability, less downtime, more powerful and flexible application management, and significantly improved security over shared hosting—not to mention better technical support.

You won’t have complete control over the server, and if your traffic or resource needs are especially high (database and web applications, streaming, web portals, etc.) managed hosting may still come up short. But for most businesses, it offers a great mix of flexibility, dependability, and power.


If you’re a “power user,” colocation is probably going to be your choice. Under a colocation setup, you own your own server and IT equipment, and you are responsible for setup and configuration. The colocation facility (data center) provides the power, cooling, storage, physical security, and bandwidth. In other words, you rent the space, not the hardware or software. Colocation centers (good ones, anyway) are like fortresses for your server—on-premise security, locked cabinets, redundant backup generators and power feeds, sophisticated air condition systems.

Colocation offers the maximum amount of freedom and flexibility. It allows you to take advantage of state-of-the-art facilities without actually constructing them, and is the best choice for companies that have very high resource demands or need to meet very specific compliance or data protection requirements. Even smaller companies, however, can benefit from colocation, since they can get much higher bandwidth and support at a lower price.

However, there are some downsides. Colocation is generally more expensive than managed hosting, especially up front (since you’ll have to buy all your own hardware, rather than lease it). You’ll also likely be responsible for fixing any hardware problems yourself, meaning you need both the technical expertise and physical proximity to the data center to do so.

What Kind of Hosting Is Right for You?

That’s where we come in. TelDesigns can help assess your business needs, current physical and intellectual resources, and short and long-term goals to help you determine whether managed hosting or colocation is right for you. We’ve aligned ourselves with some of the best colocation and managed hosting providers in the world, and make impartial recommendations based on what makes the most sense for your business. We’re also happy to help you with design, setup, implementation, and can even help you manage your contracts and shop the alternatives to ensure you always get the best deal.

To learn more, give us a call today at (616) 965-2030.

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