Colocation structure & challenges

Colocation: Strengths, structure and challenges


Alongside telecommunications networks, data centers (DC) represent the basic infrastructure for digitalization. Their importance and the performance they offer have continuously increased in recent years. In particular, the market for colocation data centers has been growing at a dizzying pace: Arizton Advisory and Intelligence forecasts a global CAGR growth rate of approximately 6.5 percent for the colocation market by 2027 (compared to 2021) . Demand is also growing in Germany. According to the industry association Bitkom, more than 10,000 businesses in the country are already using colocation services . By 2025, colocation facilities will account for an impressive 50 percent of data center capacities – up from approximately 40 percent in 2020.

Table of contents:


The principle of colocation

Colocation in the end customer segment offers businesses dedicated IT infrastructure space in a shared data center. That is to say that instead of installing their IT infrastructures in their own premises, companies rent space in a colocation center. When they do this, they generally purchase their own cabling, including servers, storage and firewalls, and pay the colocation provider for the space, cooling, power supply, bandwidth and physical security. The operating risks associated with the DC facility as well as the capital investments for the construction, conversion and provision of the “building” infrastructure are the responsibility of the colocation provider. In a colocation solution, the customer is responsible for installing and configuring their own servers and owns the cabling, hardware and software.


Advantages of colocation data centers

Companies with extensive IT landscapes often find that a combination of their own on-premises data center and a colocation data center is ideal. This is because business-critical business processes, which require enhanced monitoring and control, are best kept inhouse. Colocation should therefore not be considered as an alternative but rather as a complementary option, making it possible to extend inhouse capacity. Colocation may be a valuable option for companies that want to expand or upgrade.

Scalability: Partnership with a colocation provider allows businesses to meet their capacity requirements quickly and without the need for any capital commitment. If they are then not able to achieve the projected growth, they have the option of reducing their capacities without difficulty. This flexibility goes beyond space and power supply capacities and allows companies to increase their bandwidth rapidly in order to cope with periods of peak traffic, which can lead to performance problems and failures.

Redundancy and connectivity: Colocation data centers possess a redundant infrastructure in order to ensure one hundred percent availability. This includes multiple UPS systems, cooling units, generators, power supply networks and electricity feeds. Robust environments of this type ensure that if a critical element fails then another is available to take over its role. What is more, they generally offer highly-advanced networking as well as access to a large number of carriers and large hyperscale clouds.

Expertise on site 24/7: Data center operation demands a lot of time and specialist knowledge. Colocation requires an experienced team of experts who monitor the facility. These teams are available round-the-clock in order to resolve any problems that occur and guarantee the best possible performance.


Colocation: Typical structure and challenges

Colocation data centers typically consist of different areas such as customer areas (rack, cages, suites), zone distributors (for cooling and power) and meet-me rooms which provide the digital connection to the outside world. Data center customers use the meet-me rooms to connect to one or more carriers or to establish cross-connections.


The different areas and customer requirements confront colocation operators with a range of challenges. One of these is the continuous change of customers. Their differing cabling requirements are a constant cause of time pressures. When connecting new customers, it is often necessary to adhere to a negotiated Service Level Agreement. While the use of high-density panels permits optimum space utilization, it also often makes patching more difficult. The cabling constitutes another challenge in colocation data centers because complex cable routing is often required. Moreover, there is a high space requirement inside the cable ducts, in particular when transitioning between different fire compartments. The dynamic growth in colocation facilities also means that there is a great need for scalability. The number of telecommunications providers to be connected in the meet-me rooms is constantly growing. In this area, there is also a requirement for redundant tier IV structures.


Solutions for colocation providers

Outsourcing or the use of managed services can bring genuine added value for colocators. In such cases, an external provider is entrusted with providing IT services at precisely the time when they are needed. In this way, colocators save themselves the cost of hiring specialist personnel who they might not need in the long term. Managed services can also help relieve the workload on the colocator’s inhouse personnel during peak periods. Service providers can also help during installation activities by implementing new cable paths.

One way to save time during initial installation is to eliminate the need to clean the connectors. In optical fiber cabling systems, this is possible thanks to the use of sealed connection interfaces. Rosenberger OSI calls this quality feature PreCONNECT® PURE and currently offers it for all optical fiber cabling systems with LC, MTP® or MU connectors.

If colocation providers are to respond flexibly to different customer requirements, they need components that offer customization capabilities. The scalability of the cabling infrastructure is particularly important with regard to cage and suite customers. These customers often only need incremental increases in the bandwidth and fiber channel count in order to ensure that, as far as possible, their operating costs increase in step with their IT. Panel systems with different vertical and horizontal divisions of the front plates, variable segmentation of the panel back planes and differing panel depths offer a high level of modularity and scalability. The possibility of combining multiple connection and fiber types flexibly within one and the same panel provides an optimum solution. The highly modular and reduced-plastic 19” PreCONNECT® SMAP-G2 panel systems combine these options in a single panel. The PreCONNECT® SMAP-G2 SD is also available as a splice panel specifically for splice cabling.

In this way, Rosenberger OSI provides everything from a single source: Services and products. The advantage for colocation providers is that there is no loss of time or information and no warranty queries.


Very many businesses are opting for colocation. They often have very specific requirements regarding colocation services. Colocation providers are therefore confronted by many different challenges both in terms of the IT infrastructure and with regard to compliance with Service Level Agreements. What they need is modular, failure-proof solutions which allow them to provide their customers with an individualized, forward-looking IT infrastructure. The commissioning of external service providers is an optimum way for colocators to respond rapidly to the problems of service peaks and the lack of skilled personnel.