The movement to colocation\u2014or colo\u2014is accelerating and will have profound implications for enterprises and service providers. Colocation involves renting space in a third-party data center and can also include a mix of hardware, software, and services. The tactic is surging at a 16% compound annual growth rate through 2020, from $25.70 billion in 2015 to $54.13. By 2018, 65% of companies\u2019 IT assets will be off-site in colocation, hosting, and cloud data centers, according to IDC, while 33% of IT \u201cstaff\u201d will be employees of third-party service providers.\n\u201cColocation continues to be the bedrock for much of Cloud 2.0,\u201d says Katie Broderick, research director, 451 Research. \u201cThe global colocation market is the physical (facilities and networking) underpinning of both enterprises\u2019 off-premises computing, as well as hosting and cloud service providers\u2019 value-add services.\u201d\nA big reason for colocation\u2019s success is the opportunity to shift from a pricey CapEx (capital expense) budget line item to a much less expensive OpEx (operating expense) model. However there are a number of other benefits\u2014and implications\u2014to consider before going colo.\nTop considerations when deciding to go colo\u2014and picking the right partner\u2014include location, pricing, security, and offerings. Location is key, because the facility has to be easily accessible by your IT staff, close to a power source, and should be in a safe area\u2014i.e. hurricane belts, flood plains, and earthquake zones should be avoided.\nPricing is important because colo users are typically looking to lower their costs and make them more manageable from a budgeting perspective, i.e. usage-based pricing and monthly fees. Other factors that come into play include real estate, power, redundancy, and risk mitigation costs.\nPower usage deserves special consideration. By moving to colocation and utilizing best practices, the National Resources Defense Council (NRDC) estimates that electricity consumption can be slashed by up to 40%.\nSecurity is a vital concern when it comes to putting your data in a third-party data center. Systems and processes must be in place to ensure that only authorized personnel get access to the facilities and resources. Monitoring systems and physical barriers can also increase peace of mind.\nShifting to a colocation model is no more inherently better for disaster recovery (DR)\nor business continuity (BC) than an in-house solution, but they should be essential elements to consider when selecting a colo partner. And if you go colo, then having a second colocation relationship in a widely separated location will go a long way to addressing your DR\/BC requirements.\nIn addition, there are other requirements, i.e. scalability and cloud, as well as hidden costs that need to be considered when calculating the colo\u2019s total cost of ownership, including hardware maintenance, network bandwidth, service and support, and escalation charges.\nBut the biggest consideration is that you are profoundly changing how you handle IT, shifting from procurement to administration and orchestration of internal and externally sourced IT assets with increasing degrees of co-management with third-party service providers. The prospective rewards of colocation are huge, so it is natural many factors need to be considered before you make the move.