Retail Colocation vs Wholesale Colocation vs Hyperscale Data Center: What’s The Difference?

neuCentrIX - 26/01/2022 15:40

Colocation has become a popular alternative for modern businesses that want to avoid the hassle of on-premise data centers. Today, there are three common colocation models offered by data center providers. Let’s take a close look at these approaches and how they’re different.

Retail Colocation

Imagine reserving a hotel room. You can’t choose your room design or customize your room size, but you get access to all the existing amenities, such as gym, spa, and restaurant. Retail colocation is quite like this.

In retail colocation, you rent rack, cage, or cabinet space for deploying your own IT equipment in a facility owned by your provider and shared with other users. Similar to booking a hotel room, you have limited control over the space, but the “amenities”—cabling, racks, power, cooling, fire suppression systems, physical security, etc.—are immediately available for you.

Compared to wholesale colocation, the space, power, cooling, and connectivity options offered by a retail colocation provider are considered limited. However, retail colocation is generally way more affordable than wholesale colocation. This is why retail colocation is your option if you’re a small business, startup, or a company that needs maximum flexibility for your evolving IT requirements.

Wholesale Colocation

If your requirements as a business are more stable or long-term, wholesale colocation may make more sense to you as it offers more control at an optimal cost. 

In contrast to retail colocation, wholesale colocation is more like leasing a property to build your own hotel, as Equinix described. This colocation model allows you to decide how you want your space to be—how big it is, how it’s designed, and how it’s constructed to meet your needs. However, it requires you to lease more space and power, meaning more commitment. You also need to provide all your own resources to build the space—racks, cabinets, power, etc.—as well as the staff to run and maintain it.

Although it’s multi-tenant, wholesale colocation allows you to set up your own space and separate it from other users’ so you can ensure the security of your IT infrastructure. Thus, a wholesale colocation facility is usually larger than retail colocation. It also offers power which can handle heavier workload. What’s more, in a wholesale model, connectivity is offered in a flexible manner—you can deploy any network of your preference. 

Due to its nature, wholesale colocation is clearly more complex and demanding than retail colocation; it means more control but also more time and expertise. It’s also more expensive than retail colocation. This is why wholesale colocation users are usually larger enterprises, large content and media providers, large cloud service providers, IT managed services and telecommunications companies, as well as government agencies.

One thing to note about retail and wholesale colocation is that the two models can be combined to meet your requirements.

Hyperscale Data Center

A hyperscale data center provides colocation services for a specific target market.

Think about hyperscale companies like Amazon, Alibaba, Facebook, Google, IBM, and Microsoft. These companies require massive amounts of space and power to handle the operations of thousands of servers for cloud, big data analytics, or storage tasks. They also need specifically designed and deployed power and cooling redundancy to ensure zero downtime. Quoting Equinix, a hyperscale data center is a type of wholesale colocation engineered to meet the technical, operational, and pricing requirements of these hyperscale companies.

Typically, a hyperscale company doesn’t allow other companies to connect inside its space. Instead, it places a network extension or network node into a hyperscale data center facility, allowing other companies in the retail facility to connect to the hyperscale company.

Those are three colocation models available today. Each has its own specifications and characteristics, as well as pros and cons. Make sure you know what you need so you can choose the right one for you.