There are two major groupings most data centers fall within: wholesale data centers and retail data centers. Retail data centers are offered by colocation data centers which provide both retail and rental options for small businesses.

At a basic level, colocation facilities provide leasing options to rent single servers, cages, and racks. These options are highly suitable for businesses wanting to take advantage of colocation on a budget.

Wholesale colocation is preferred by larger enterprises that require entire rooms or facilities, leasing up to tens of thousands of square feet. 

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Wholesale Data Centers

When size is a major factor in the decision process, going with wholesale colocation is the best option. However, the major difference between the two comes from the pricing structure for power usage; in wholesale environments, the power will be metered.

Metered power translates to an enterprise being solely responsible for paying for the energy it consumes. For example, if there is a surge one month but traffic slows down the next, this will reflect in the amount needing to be paid to the facility.

Wholesale data center customers are also distinctly different, as they do not usually require much network diversity. Further, wholesale providers are often carrier-neutral, meaning you will not get the same network diversity provided by a traditional colocation center.

Wholesale customers have complete autonomy when it comes to access to their infrastructure, managing and maintaining their internal resources in their dedicated space.

Upon signing the lease agreement, the enterprise is responsible for designing and building its infrastructure, including connectivity to staffing.

Colocation Data Centers

Small businesses often choose colocation providers since they usually need less than 100 kilowatts for their operations. Businesses simply pay a flat fee without any room for surprises down the line.

Colocation retail providers charge businesses on a per-circuit basis, meaning you will pay for the entire circuit regardless of usage. This pricing structure is a great option if space and power requirements are minimal because the power requirements can scale with the business as it grows.

There will also be extensive carrier diversity in this setting, enabling small businesses to maximize their interconnection with various networks, partners, and service providers.

As colocation customers share the space with other businesses, they must depend on data center staff to manage the servers—a massive departure from a wholesale setting where the enterprise’s staff is responsible for equipment maintenance and management.

The Bottom Line

In recent years, the lines separating wholesale data centers and colocation data centers are beginning to blur, with numerous hybrid solutions popping up on the marketplace. This change is beneficial for businesses of all sizes, as an abundance of options makes it easier to find the right solutions for their requirements and budgets.   

How do you go about finding the right solution for your colocation needs? Let us know your thoughts in the Comments section below.


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