Why More IT Leaders Are Choosing Colocation Facilities Over In-House Servers

In-House Infrastructure Is Getting Harder to Justify

For many organizations, in-house infrastructure once meant control. Today, it often means constraints from rising costs to mounting compliance pressure. But the reality in 2025 looks very different.

Energy costs are rising. Compliance demands are tightening. Downtime is more expensive than ever. And scaling fast? That’s tough to do in a server room that’s already stretched thin.

That’s why forward-thinking IT teams are moving to colocation facilities. Not because it’s a trend, but because it solves real infrastructure challenges with flexibility, security, and efficiency built in.

Here’s how colocation addresses these challenges and why it’s become the go-to strategy for forward-thinking IT teams.

What Is a Colocation Facility?

A colocation facility is a professionally managed data centre where you can house your own servers and infrastructure without handling the power, cooling, physical security, or building maintenance yourself.

It’s not cloud. It’s not in-house. It’s a middle ground that gives you control over your hardware, with enterprise-grade infrastructure and always-on support behind it.

6 Key Benefits of a Colocation Facility

1. Built-In Compliance and Certifications

Colocation providers typically operate with third-party certifications like:

• SOC 2
• ISO 27001
• HIPAA
• PCI DSS

This saves your team from having to build (and document) compliance controls from scratch and makes audits significantly easier.

Pro Insight: For industries like healthcare, finance, and government, using a certified colocation provider can accelerate time to compliance and reduce audit risk.

2. Cost Efficiency at Scale

Running in-house infrastructure offers complete control but comes with significant capital and operational overhead, from energy costs to staffing requirements.

Colocation shifts that burden. You avoid high upfront investments for space, cooling, and power infrastructure. Instead, you benefit from predictable operating costs and shared infrastructure that drives long-term efficiency.

Need faster connections? Colo providers buy bandwidth in bulk, so you get more for less.

3. High Uptime and Resilience

Realistically, what’s your uptime right now? Can you confidently say it meets your SLAs?

Top colocation facilities are designed for failure: redundant power sources, backup generators, advanced cooling, and real-time monitoring. Most offer contractual uptime guarantees (often 99.99% or higher).

And if something does go wrong? You’re not relying on an on-call technician. You have a full-time team on-site to resolve it.

4. Fast, Flexible Scaling

When your business grows, your infrastructure should scale with it.

With colocation, you can expand rack-by-rack or region-by-region without major construction projects. That agility is essential for businesses adopting hybrid cloud, launching new services, or expanding globally.

5. Enterprise-Grade Security

Colocation facilities are often more secure than in-house environments:

• 24/7 staffed entry points
• Biometric access controls
• Video surveillance and mantraps
• Segmented access zones and strict visitor policies

That’s in addition to robust network security measures that are updated continuously.

6. Sustainability and Operational Focus

Maintaining HVAC systems, tracking carbon use, monitoring uptime – it all takes time your IT team shouldn’t spend.

Colo providers handle facility operations, freeing your team to focus on innovation. Many also operate with green certifications and energy-efficient designs, supporting your ESG goals.

In-House Server Rooms: Hidden Costs and Limitations

Still managing infrastructure down the hall? Here’s how in-house compares:

Hybrid Approaches: Best of Both Worlds

Most organizations aren’t going all-in on cloud or keeping everything in-house. They’re building hybrid models.

Example: A fintech firm colocated its compliance-sensitive production workloads while keeping dev/test in the public cloud. The result? 35% lower infrastructure costs, stronger audit posture, and faster deployment cycles.

When In-House Still Makes Sense

In some cases, sticking with in-house infrastructure is strategic:

• You’re running stable legacy systems
• You require full physical control for regulatory reasons
• You have low and predictable growth needs

Even then, many organizations use colocation as a backup or disaster recovery site.

Signs It’s Time to Consider Colocation

• Infrastructure is aging or nearing end-of-life
• You need to scale, but CapEx isn’t feasible
• Compliance requirements are intensifying
• Your IT team is bogged down in maintenance tasks

Smart Questions to Ask a Colocation Provider

• What compliance certifications do you support?
• How do you handle remote hands and after-hours access?
• Can I scale power density or rack space as needed?
• What’s your SLA, and how is it enforced?
• How do you integrate with public cloud providers?
• What’s your energy efficiency or sustainability roadmap?

Strategic Colocation Insights: Answers to the Questions IT Leaders Ask

What’s the difference between colocation and cloud?

Colocation involves deploying your own hardware in a third-party data center, where you retain full control over infrastructure. Cloud computing, by contrast, relies on the provider’s infrastructure, which is abstracted and delivered as a service on demand. Colocation is ideal for organizations needing greater control, compliance, and hardware customization.

Is colocation more secure than in-house infrastructure?

In most cases, yes. Colocation providers offer enterprise-grade physical and digital security, including biometric access controls, mantraps, 24/7 surveillance, and network segmentation. These controls often exceed what’s possible or cost-effective for in-house deployments, especially at smaller facilities.

Do colocation facilities offer 24/7 access?

Yes. Most tier-3 or higher colocation facilities provide 24/7 physical access, along with remote hands services. This allows your team to perform reboots, maintenance, or equipment swaps even when they can’t be on-site.

How long does it take to migrate to a colocation facility?

Migration timelines vary. Smaller, well-documented environments can move in as little as 2–4 weeks. For more complex or regulated environments, 8–12 weeks is standard. Proper planning, clear asset documentation, and stakeholder alignment are essential for minimizing disruption.

Can colocation support hybrid and multi-cloud strategies?

Absolutely. Many colocation facilities offer direct cloud interconnects to providers like AWS, Azure, and Google Cloud, allowing you to build low-latency hybrid environments. Colocation serves as the physical foundation of your private infrastructure, with seamless extensions into public cloud environments for agility and performance.

What kind of support is included with colocation?

Colocation providers typically offer infrastructure-level SLAs covering power, cooling, and physical security. Many also provide 24/7 remote hands support, inventory management, compliance assistance, and optional managed services. Be sure to review the provider’s SLA and support scope to ensure alignment with your operational needs.

Final Takeaway: Infrastructure That Moves With You

Colocation isn’t a trend, it’s a response to the realities of IT in 2025.

It delivers enterprise-grade performance, compliance-level security, and scalable flexibility without the complexity of managing physical infrastructure in-house. If your in-house environment is strained, now is the time to consider colocation. 

Discover how secure, scalable colocation can bolster your infrastructure plan, with Opus Interactive’s trusted experts supporting you. Ready to find a solution tailored to your business? Contact Opus Interactive to learn more about our secure, compliant colocation facilities.