Three Considerations When Comparing Retail vs. Wholesale Colocation

By Adam Burnham | March 7, 2022

The pandemic will be remembered for many things, but when it comes to the business world, one of those things will undoubtedly be the impact on how organizations do business. While many had existing flexible work-from-home policies, in a blink of an eye, organizations were challenged to develop long-term hybrid work policies. For those who relied primarily on on-premise infrastructure, this was problematic. Equipment that was once within reach for IT staff daily was all of a sudden no longer easily accessible.

While many of the wrinkles of the early remote work days have been ironed out, the pandemic has pushed businesses to rethink their infrastructure strategies completely. In addition to the downfalls of private, on-premise infrastructure, the challenges of cloud-only environments have also been widely observed. Instead, in an effort to find solutions that will support businesses regardless of the world landscape, organizations have started to evaluate options that ensure their infrastructure is always within reach, while successfully meeting the needs of the company.

Enter, colocation.

Colocation has always been a great option for organizations, but when considering a future when many employees want and expect to continue to work from home, colocation has emerged as an even more compelling offering.

A survey found 31% of IT professionals, who already use colocation as part of their infrastructure mix, have given themselves an “A.” Those who embraced colocation rated their infrastructure strategy the highest.

At Markley Group, more and more of our conversations with customers and prospects are centered around the benefits of colocation. But as those conversations have shown, not all colocation options are right for every organization. Individual business needs and goals play an important role in what colocation offering will work best for each organization.

In that vein, one of the questions we get asked most often are the differences between retail and wholesale colocation – and why one solution vs. another is better. At a high-level – in retail colocation situations, a customer leases space within a data center, usually a rack, or a caged-off area. In wholesale colocation, it typically means a tenant leases a fully-built data center space. Oftentimes the tenant is then responsible for handling all IT operations in that space (but not always).

Our team of experts understands that each organization is different, and it’s critical they choose the solution that’s right for their particular situation, period. Since that’s not always easy to determine, we’ve pulled together the top three things to consider when deciding between retail colocation or wholesale colocation:

1. Size & Space – Do you only need a small amount of space? If so, retail colocation might be the right fit. Retail colocation is often geared towards businesses, start-ups, and government agencies who have a need to dedicate space for a limited amount of time to complete data analysis or testing projects, and then won’t need the space again for months. Alternatively, if an organization needs a lot of space or to meet regulatory standards, wholesale colocation could be more appropriate.

Life science and pharmaceutical organizations are two types of organizations we see benefit from retail colocation. That’s because many of them need dedicated space for a limited amount of time to complete data analysis or drug tests, and then won’t need space again for months. Alternatively, if you need a lot of space or need to meet stringent regulatory standards, like a financial services organization, wholesale colocation could be more appropriate.  

2. Scalability The need to be able to expand capacity quickly and easily is also an important consideration. If your organization is in a period of high growth, expect to create and need infrastructure at an exponential rate (and want to use the same facility), and are looking for many customization options, wholesale colocation is right for you. If you’ve simply reached capacity at another on- or off-site facility and need a bit more space, or are looking to store more  in different geographies, retail colocation could be a better route.

3. Staffing – One thing people often misunderstand about colocation is the managed services that come along with it. For some organizations using colocation, they’re looking for a soup to nuts offering, meaning the colocation provider also provides the manpower  behind it. If you don’t have the time, staff or resources to manage and maintain your own colocation space, you should consider retail colocation. Instead, if you’re looking to bring your own infrastructure and human resources to your colocation strategy – which could be more effective for larger companies – wholesale colocation is more likely to fit your needs.

Of course, there are a slew of other considerations that could be critical to your organization when making a decision on colocation. However, the bottom line is, there’s a solution out there for every company and every situation that will help you save resources while taking advantage of the eliminated equipment costs, improved security, decreased management and lower power expenses that colocation offers.

To learn more about our colocation facilities and what they can offer you, drop us a line at or visit: