The first thing most Nigerian SMEs must deal with, is the velocity of the Nigerian economy. With the constant changes in many of the factors affecting the pricing of goods and services, Companies in Nigeria must usually look for the best options for their different needs. And sometimes, these needs are very important, like the need for a Data Centre Colocation. 

Nigerian SMEs’ and companies have had to deal with maintaining the cost of in-house server rooms and sometimes, it just takes a toll on the business. Think of it as an integral part of such businesses but, with the resources needed to keep it running effectively, at least with an uptime of 99.99%, the costs can become crippling quick. 

So, what exactly is Colocation and why is it now the best option for SMEs’ and organizations?

What is a Colocation Data Centre?

Using the most basic explanation possible, data center colocation is the practice of renting secured space within a professional, third-party facility to house your own critical IT equipment. Instead of using space in your corporate office or dedicated on-premises server room for your servers, cables, networking devices, and other computing gear, you rent a dedicated section—typically a cabinet, rack, or secured cage—within a specialized, high-tech building.

This distinction is fundamental to understanding the service:

•    A Data Center is the physical location—the structure that contains the equipment.   
•    Colocation (or “Colo”) is the service leveraged by your business to place and manage its infrastructure components within that facility.   

The business renting the space always retains ownership and full control over its physical hardware and data. The colocation provider’s core mission is to handle the complex, heavy lifting of maintaining the environment itself.

The Colocation Value - Control Without the Cost

For Nigerian businesses, the shift to colocation is driven by a clear commercial and operational mandate: securing reliable uptime while lowering the Total Cost of Ownership (TCO).   
Building and maintaining a dedicated, on-premises data center involves immense upfront Capital Expenditures (CAPEX). This includes purchasing and maintaining mission-critical, high-cost systems such as uninterrupted power sources (UPS), multiple industrial backup generators, power grids, and advanced HVAC units. These capital burdens are especially challenging in a market where stable power availability and reliable infrastructure cannot be assumed.

Colocation solves this problem by utilizing a shared operational costs model. Tenants share the expense for shared physical resources, including:   
•    Power Systems and Redundancy: Advanced UPS power protection and generator capacity, which provide multilayer redundancy and ensure business-critical processes keep running.   
•    Advanced Cooling Systems: High-density air and liquid cooling techniques necessary to manage modern, high-performance servers in our climate.   
•    Physical Security: Multilayer security systems, including controlled access and surveillance, designed to safeguard mission-critical assets.   
By leasing space, your business benefits from enterprise-grade infrastructure built to global standards—often meeting rigorous Tier III certification for concurrent maintainability—without the massive initial investment. This makes colocation simpler and significantly more cost-effective than managing dedicated facilities. 

Beyond the Physical: Access to Expertise and Ecosystems

In a high-growth market like Nigeria, colocation providers offer benefits that extend far beyond a secure rack:

1. Guaranteed Reliability: Many leading colocation facilities in hubs like Lagos are designed to provide industry-leading uptime guarantees, often exceeding 99.999%+ Service Level Agreements (SLAs). This operational reliability is a non-negotiable insurance policy against infrastructure volatility.

2. Expert Support (Remote Hands): When a technical issue arises with your hardware, you need immediate resolution. Professional colocation facilities offer a "Remote Hands" service—round-the-clock support from certified, on-site technicians (sometimes called Smart Hands) who can quickly troubleshoot, reboot, or manage equipment on your behalf. This provides constant visibility and control of your physical assets, just as if you were managing them in your own office.

3. Interconnection and Hybrid IT: One of the most strategic advantages is connectivity. Facilities like Rack Centre in Lagos are designated as Carrier Neutral. This means they offer low-latency access to a vast ecosystem of networks, cloud providers (like those used by AWS or Google), Content Delivery Networks (CDNs), and international carriers. This makes colocation the perfect, secure launchpad for a Hybrid IT strategy, allowing you to combine the security and control of your dedicated servers with the scalability of public cloud services.

For Nigerian enterprises and global operators entering the market, colocation is not merely a technical solution; it is a strategic maneuverer. It enables organizations to pivot their resources away from the complexities of infrastructure maintenance and focus entirely on core business innovation, leveraging world-class reliability right here in Lagos, Ikeja, or Victoria Island.  

For companies and SMEs’ looking to explore the possibilities and benefits a Colocation Data centre offers, click below to reach out to the team at CWG – a company with over 30 years in the tech infrastructure sector, with the right resources, personnel and knowledge to help you scale as a business. Click here to send us a mail.