How Much Does Colocation Cost? The Line Items Behind a Quote

How much does colocation cost? It is the sum of a few line items: rack space, power, bandwidth, IP addresses, and some one-time work to get your servers installed. Rack space is usually the smallest of them, and power is usually the biggest. Know what each line is and why it moves, and you can compare any two quotes fairly.

The short answer to how much colocation costs#

There is no honest single number, because two 1U servers can draw very different power and push very different traffic. The best public benchmark is for large buyers. CBRE's North America Data Center Trends H2 2025 report put the average asking rate for a 250 to 500 kilowatt deployment in primary markets at a record of about 196 dollars per kilowatt per month.

Small footprints pay more than that per kilowatt, because a building's fixed costs are spread across less power. So use the benchmark as a floor for thinking, not as a price for your 2U. We do not publish a colocation rate card; an engineer quotes each deployment line by line, for the reasons below.

The line items on a colocation quote#

Power is the real cost driver#

A data center's limit is rarely floor space. It is how much power it can deliver and how much heat it can remove. That is why serious colocation is priced on power, and why per-U rent is the smallest line on most bills.

The math an engineer will check: watts equal volts times amps. A 208V circuit at 20A is about 4.2 kilowatts on paper. Electrical practice keeps continuous load to 80% of a breaker's rating, which leaves about 3.3 kilowatts you can really use. A modern dual-socket server can draw several hundred watts under load, so a few busy servers fill a circuit long before they fill a rack.

Two things move this line on a quote. First, a committed amp is billed whether you draw it or not, so measure your real draw under load before you ask. Second, redundant A and B feeds mean each server has two power supplies on two separate circuits, so one feed can fail without an outage. Ask any provider how the pair is counted, because it changes the number.

Bandwidth: flat-rate or 95th percentile#

A flat-rate port is one number every month, and you can run it as hard as you like. A 95th percentile commit is the industry's burst model. We sample your traffic every five minutes, throw away the top 5% of samples, and bill the highest remaining rate against your commit. In practice, about 36 hours of your heaviest traffic each month is free.

Steady traffic around the clock usually favors flat-rate. Spiky traffic, such as launch days or backups at night, usually favors a percentile commit. Our flat-rate versus 95th percentile guide walks through the choice, and we will run your numbers both ways if you send 30 days of traffic graphs.

IP space and the costs people miss#

IPv4 addresses are scarce and have a market price of their own. You can use addresses from your provider or bring your own; our IPv4 and IPv6 addresses guide covers both. We covered the lease and purchase market in depth in IPv4 for a new hosting company.

The costs buyers miss are the ones outside the monthly line:

• Remote hands. Someone has to swap a drive or power-cycle a frozen box. Ask what is included and how fast it happens. Our engineers do every install and swap; customers do not need floor access. Details are in shipping hardware and remote hands.
• Cross-connects. A cross-connect is a cable patched between your rack and another network in the same building. In a carrier hotel it is a ticket and a few days of lead time. In a suburban site it can mean renting a circuit every month.
• Travel and downtime. If your provider expects you to visit, the drive is part of the bill.

Why a cheap per-U price can cost more#

A low per-U price is easy to advertise because it is the smallest line. The rest of the bill decides the total: power, the network you can reach, and what happens at 3 a.m. We made that case in full in Seattle colocation in a downtown carrier hotel, and the same post covers when renting a virtual dedicated server from us beats buying your own hardware.

How to get a real number#

Send the quote request with the facts already in it: rack units, power draw per feed, port speed, billing model, IP needs, and the hardware you are shipping. Our colocation quote checklist lists exactly what to include. The reply is a line-item quote with the recurring price and any setup broken out. Our Seattle colocation runs inside Lumen Seattle 1 at 1000 Denny Way, under a credit-backed 99.9% network uptime SLA.

FAQ#

How much does 1U colocation cost?
It depends mostly on the power that 1U draws and the port you attach to it. Two 1U servers can price very differently. Ask for a line-item quote rather than comparing headline per-U rates.

Is colocation cheaper than cloud hosting?
For steady workloads on hardware you already own, often yes over a few years. For small or changing workloads, renting a server is usually simpler and cheaper. The break-even depends on how long you keep the hardware.

Why is colocation priced per kilowatt?
Because power and cooling are what a data center runs out of first. Floor space is the cheap part, so the price follows the power you reserve.

What should a colocation quote include?
Space, power commitment, ports and the bandwidth model, IP addresses, and one-time setup, each on its own line. It should also state the SLA terms rather than leave them out.