Leaning Towards Co-Location

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With the online industry at a halt, ebusiness economists struggle to reduce operational costs for their companies. For those dot coms that thrive on traffic, there is no doubt that efforts have been focused on reducing hosting and bandwidth costs. And many have asked themselves “Is co-location cheaper than a dedicated managed server?”

What is Co-Location?

With co-location the Webmaster provides the server, and houses it in a data center or facility that links it to the Internet. Typically, the customer pays a housing fee (called a “rack fee”) in addition to the Internet uplink that runs directly into their server. Dedicated servers, on the other hand, are just that: you have a server dedicated and rented to you, which is managed by the data center or provider, but you do not have absolute ownership over the server.

This is the reason why many favor co-location. After a year of paying a dedicated server, you’ve probably paid the server off 3-4 times over, and yet you have no ownership of the hardware. However, if you don’t expect to have a great deal of traffic, and you’d prefer the additional support that providers give, a dedicated server may just be the right way to go. Owning the server and being responsible for replacement hardware may be an unnecessary cost for your business. In the extremely competitive dedicated server market, you’re looking at $100 (low-end) to $500 per month for a good server. Nevertheless, if you already experience traffic growth and require more resources, possibly even an additional server, I would suggest you consider collocated server(s).

Co-location and dedicated servers compare to buying a home and paying property tax or renting an apartment. Both have their advantages, but they vary according to the situation. The only way to know what you are getting into is to sit down and do the math. Co-location is more expensive at the onset, and cheaper in the long run. Dedicated servers are more expensive in the long run, but cost less up front.
If you feel that co-location is the best solution for your business, this article will explain how you can establish a reliable Web presence using co-location.
This guide will cover the following:

  1. Prices, benefits and disadvantages of operating systems.
  2. A briefing of server hardware prices and the suggested use for each.
  3. The recommended approach to selecting an ISP.
Selecting an Operation System

There are several different Network Operating Systems available today, so finding one that satisfies your needs while complying with your budget can be a difficult task. I’ve chosen two of the more popular ones to discuss here: Windows NT and Linux.

Windows NT

The obvious difference between these two popular operating systems is that NT attempts to bring the familiar Windows interface to a server environment. NT allows Webmasters to operate their server by pointing and clicking, which has been a major contributor to the increased popularity of NT. Aside from the user-friendly interface, NT is ideal for sites that plan to run third-party developed software, and NT makes it especially easy to work with databases (Access, Oracle, SQL, DB2).

Price: $300


Linux, my personal favorite, is undeniably harder to learn, but it’s probably the most secure OS. You can expect a Linux machine to literally run for years without crashing. In addition, very few viruses have been found on Linux machines, and Linux runs very efficiently on almost all hardware. Linux sites usually run the free Apache Web server, and while it lacks the point-and-click tools that NT incorporates, the majority of experienced administrators prefer the flexibility that Linux gives by allowing you to work with the raw code.

Price: Free

Selecting Server Hardware

Selecting the correct hardware for your server is as critical as picking an OS. The three most popular platforms in the industry are Sun, Intel, and Cobalt. Sun is acknowledged in the server business for its speed, efficiency, and its reliability; however, Intel does not stray far behind, and tends to be much more affordable for the average Webmaster.

Cobalt, owned by Sun Microsystems, has recently become a major player in server hardware. Cobalt is perfect for Webmasters who need to support many sites, and is the most inexpensive of the three. The Cobalt RaQ server is a great out-of-the box machine, but it is not recommended for high traffic sites.

I’ll presume you’re building your own server, having decided not to purchase an out-of the-box machine.

Networking Cards

The next step is to select your networking card. There are countless networking cards (NIC) available, but I don’t advise you opt for a cheap one. Your NIC is your connection to the Internet, and since you are co-locating (paying for the hardware yourself), you will experience some major downtime and expenses, in both labor and parts, if you’re forced to make a replacement.


Selecting the amount of memory for your server can vary with your plans, but I’d strongly recommend that you purchase at least 256MB. The server will store accessed Web pages in the memory, so the more memory you have, the more pages can be stored.

Hard Drives

Hard drives also play a major role in performance. Hard drives generally come in speeds of 5400, 7200, 10,000, and 15,000 RPM. These numbers represent the speed at which the metal disks inside the hard drive rotate. Needless to say, the faster the rotation speed, the faster your server is able to access data.

There are two types of hard drives – SCSI (Small Computer Systems Interface) pronounced “skuzzy” and IDE (Integrated Drive Electronics). The recommended hard drive for a Web server is 7200+RPM SCSI.

Selecting a Provider

Selecting your provider is undoubtedly the most important decision in this process, and should not be taken lightly.

While it may seem evident, the first step is to determine what your needs are. I suggest that you write down what you need from a host and what you don’t, and keep this list in front of you while you “listen” to the sales pitch. Otherwise, you may be sold on the small things providers are so aggressively marketing, without ensuring you get exactly what you need.

To begin your research, visit HostChart and Host Amigos. After finding a provider at HostChart, I recommend visiting HostAmigos to research the overall reputation of the provider(s) that interest you.

Things to look at while searching for a provider include:


One obvious factor you should pay special attention to is the price. I do not suggest that you find the cheapest host, because the saying “you pay for what you get” definitely applies to Web hosting. You may be tempted to take the cheaper route, but having frequent downtime is very unprofessional, and will result in instant credibility loss among your users.

Technical Support

Available technical support is another issue that should be taken seriously, and ought to play a major role in your decision. Most reputable hosts have 24/7 support via email and phone.

Unfortunately, if you have a problem with your server hardware, support will not cover this. However, problems can arise with your connection, or when you’re setting up your server, and a quick response is crucial.


Another vital aspect I strongly urge you to look into is your host’s connection. You may have the best hardware for your server, but if your host cannot match this with a good connection to the Internet, you may experience downtime that results in loss of business. Good hosting companies have multiple connections to the Internet, and should also facilitate the use of on-site back up equipment in case of a power failure.

5 Questions to Ask Your Host!

To summarize the above information, I recommend you ask the following questions:

1. Do you provide 24/7 support? Via email, phone, etc.?

This is extremely important. A good method of testing the hosting company’s level of support is to call their support line and see if you can reach someone, or to simply them send an email inquiring about a hosting package and compare their response time to that of other companies.

2. What type of back-up systems do you have in place?

In addition to this, you should ask what the fees for back-ups are, and how often they’re performed.

3. Do you provide a 30-day money back guarantee?

If you have paid a set-up fee, and end up switching hosts because you are unhappy with them, you may find yourself a few hundred dollars out of pocket. Also, most reputable hosts offer a 30-day money back guarantee incentive, which also shows their confidence in their own service.

4. How many connections to the Internet do you currently have running in to your facilities?

Most reputable hosts will have at least two connections running into their data center. This is fairly important: in the case of a line getting cut you will not experience downtime.

5. What is the turnaround time for server setup?

While this will certainly vary with the urgency of your project, I would not recommend a host that says it will take a week or longer to set you up. If they are that slow getting you online, it’s doubtful that they can provide you with adequate support.

I’ve heard countless horror stories from Webmasters who received the dreaded call from their provider to tell them to cough up money they didn’t have for a NIC card, or hard drive. If your financial situation is equally precarious, go with a dedicated server. Having a dedicated server does not affect how others perceive your business, but having an unreachable homepage means instant credibility loss. If you’re still convinced that co-location is the option for you, take a very cautious approach in selecting your host, and in case of hardware failure, you can always leave a spare NIC card with your provider.

Zachary BocaZachary Boca
View Author

Zak is an online advertising enthusiast. His projects include RateMyHost.com, and NexAds.com.

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