Managed Hosting Vs Colocation: The Key Differences

TRG datacentre
TRG datacentre

If you’re wondering which option between managed hosting vs colocation is best for you, it helps to understand the differences, and the similarities, between the two.

The key difference is that with managed hosting, you don’t actually own the server. With colocation, however, you do own your server and you have full control over it, but it will simply be stored at a host’s data center.

The different solutions are ultimately suited to the different needs and growth stages of your business. 

What is Managed Hosting? 

Managed hosting is an IT service for customers to lease dedicated hardware from providers such as Oplink or NETdepot. This a solution that includes servers, storage space and network hardware.

Once managed hosting has been chosen, an operating system is provided while the service provider manages the admin, and support of the solution. 

Managed Hosting Features

As the name may suggest, managed hosting means you are leasing your server from another company. For many businesses, managed hosting wins the debate over managed hosting vs colocation because there’s no need to manage the server yourself. Everything is managed for you – for a fee, of course.

Some of the key features of managed hosting include:

Server Management

Managed hosting companies will manage everything for you, making it an ideal choice for companies that have limited technical ability and don’t want to have to have to manage it themselves.

Affordable Start-Up Price

With managed hosting, there is no need to invest in your own servers and other equipment, and the costs of leasing are typically spread over monthly payments. This makes managed hosting the more affordable option in terms of start-up cost.

Managed Upgrades

A managed hosting service provider will usually handle upgrades for you. This is beneficial to many businesses that don’t want to have to invest the capital in making upgrades themselves. A potential downside is having to wait for upgrades to be undertaken. 

What is Colocation? 

Colocation or colo, is the renting of space for servers and computing hardware from a third-party’s datacenter. Colocation hosting services include:

  • The building, where everything is housed
  • Networking
  • Security 
  • Redundant power 
  • Redundant cooling components 

Colocation Features

With colocation server hosting, you own the server yourself and are renting space in a data center facility. 

Some of the key features of colocation include:

Control Over Your Server

Perhaps the main benefit of colocation is that you own your own servers and have full control over them – which is why organizations choose this over hosting. This means that businesses can upgrade their servers as they see fit if they need improved performance.

High Bandwidth

With a colocation service, the data center where your server is located is likely to use high bandwidth. This means your customers and staff have easy access to information and websites without long loading times.

Managed Services

Colocation centers will sometimes require your business to buy, set up and manage your equipment day-to-day however, managed colocation services (like our Colo+ service) provide an experience more similar to managed hosting in this respect with the added benefit of you owning your hardware. Managed services means receiving on the ground support for day to day server management as well as taking care of set up and maintenance. 

Remote hands

Although colocation lets you remain in full control over your servers, there is also the addition of remote hands to provide minor updates and solutions for emergencies. By delegating in this respect, organizations can save resources and technical personnel for more pressing internal tasks. Read more about why we offer free remote hands to all customers here.

Managed Hosting vs Colocation: The Similarities

In addition to those mentioned, there are other reasons why both options are a good choice when it comes to managed hosting vs colocation. Some of these reasons include:

Off-Site Locations

When you choose either option, your servers will be located away from your actual business premises. This makes your data a lot more secure against data theft and disasters, and server hosting companies tend to have high security against all potential eventualities

Dedicated Servers

Both managed hosting and colocation means you have your own dedicated server, regardless of whether or not you own or rent that server.


If you need more server capacity, both options allow you to scale up. With managed hosting you can rent more server space, while with colocation you can buy more servers to be located at the data center.

Downtime Protection

Downtime is something that can be very damaging to a lot of businesses. Data centers typically have backup systems in place to help ensure that your data is always accessible regardless of power outages and other similar problems.

When is Colocation More Suitable than Managed Hosting?

Which choice is best for you between managed hosting vs colocation will depend on a number of factors, including your needs and your budget. It’s also becoming more common to see businesses use a combination of colocation and managed hosting to suit their mixed workloads.

Colocation tends to be the first port of call for scaling enterprises that have the resources to invest in their own servers, with many then choosing the addition of managed hosting at a later date. Ultimately, colocation provides that extra layer of security and consistency letting organizations sign on to annual or multi-year contracts without having to experience fluctuations in connectivity. 

With IT infrastructure moving increasingly off-site, colocation allows you to remain in control of your servers while still providing all the benefits of on-site expertise from trained professionals. 

Get advice on colocation 

Here at TRG Datacenters, we have over 20 years of experience in the data center business and three generations of data center operators. Read more about our Houston Data Center or Houston Colocation. If you are feeling overwhelmed with choosing from the many options available for your colocation, we would be happy to manage your hardware for you.

We offer fully managed colocation through our Colo+ service, which includes migration, rack and stack, and free remote hands on, so you never have to touch your gear again. Don’t hesitate to call us at 832-663-6028 or email us at