Kara Manon Data Center Dictionary: Colocation

April 4, 2013 by · Leave a Comment 

Our last data center dictionary entry covered Disaster Recovery. We discussed what disaster recovery is, how to reduce various threats, and how to begin your own disaster recovery plan. Next, we move to Colocation.

What is colocation?

Simply stated, colocation is the practice through which a business locates its servers and IT equipment in an offsite data center. These facilities are often designed provide rich connectivity options, which would be otherwise unavailable to a business or organization. In application, colocation allows a business to locate its servers and other IT equipment securely in a data center. As opposed to dedicated server hosting, colocation allows businesses to own and manage their servers in an environment designed to support and enhance server activity.

Why do businesses practice colocation?

Colocation provides businesses with several advantages, including:

  • Improved facility and network security
  • High uptime and availability
  • Increased connectivity options
  • Cooling, electrical and networking redundancy
  • Scalability for future growth
  • Cost-effective bandwidth
  • Outage protection

Who should consider colocation?

While colocation can be a great resource for all businesses, medium and large-sized organizations should consider colocation. Industries that regularly handle highly sensitive information, such as financial services and healthcare, benefit from colocation because data centers have exceptional security measures in place.

Why should a financial service company consider colocation?

Today’s financial environment has given the advantage to the quick, connected, and agile. Colocation allows companies the speed, availability, and compliance adherence necessary for success. The boom in electronic trading allows companies to make transactions almost instantly but has also created an environment in which speed directly affects success. The most successful companies in this industry obtain and analyze market information to make quick and accurate decisions, and each second matters.

Colocation also prevents companies­­ from suffering at a loss of latency. With 100% availability and uptime, a financial organization can be certain they will not miss an opportunity which might lead to a costly loss. Finally, because these companies handle sensitive data regularly, they must adhere to stringent compliance regulations. For more information about compliance, financial services, and colocation, we recommend reading our white paper, A Guide to Financial Services Regulations.

Healthcare and Colocation

In today’s healthcare environment, the IT infrastructure may be as important as the care itself. A new study published in the January/February Annals of Family Medicine estimates that 70% of family physicians are using Electronic Health Records (EHR) and by the conclusion of the year over 80% will use EHRs. Healthcare providers at all levels—from hospitals to family care practices—are relying heavily upon EHR and other technology. Today technology in medicine is no longer just for operational efficiency but also for effective patient care. Because the role of technology in healthcare has evolved as a critical component in any healthcare organization, these organizations should consider colocation. It ensures effective operation and excellent patient care as well as HIPAA and HITECH compliance.

Ultimately, colocation is a way that businesses can protect themselves and outsource its IT infrastructure. For more information on colocation and Data Cave’s colocation services, please contact us.

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