Managed hosting is similar to dedicated hosting, but with added benefits. Managed hosting gives the host control over the server; the benefits being that you receive services like reporting, monitoring, security, setup, system administration and software updates. So you don't have to be a hosting expert or have an IT department to manage and operate your dedicated servers.

When opting for managed hosting you save on up front expenditure, spreading the cost in a more even way and gaining a quicker Return on Investment.

Co-location allows you to buy physical rack space from a web hosting provider, along with a network and basic infrastructure, but you're able to manage and operate it from your own premises.

Although co-location hosting seems like a cheap option, there are hidden costs to be taken into consideration. There are three main pitfalls to co-location hosting. Firstly, the initial cost of equipment can be exorbitant, making for a negative impact on your ROI. Secondly, the cost of upgrading equipment must be taken into consideration. Server component technology is constantly developing, and keeping up with the changes can be costly. Thirdly, and this is very important, you should have sufficient backup hardware and qualified technicians on hand to handle any problems which may arise. The capital expenditure on hardware reserves for all the server components alone can amount to a tidy sum, and the cost of level three technicians who can efficiently diagnose and handle difficult problems can also be considerable.

The main difference between managed hosting and co-location is the lengths the web hosting provider will go to in order to take care of and manage the customer's administrative tasks.

While co-location leaves customers to "fend for themselves", managed hosting often gives the customer access to additional services such as firewalls, VPNs and load balancing. With managed hosting you can also receive free monitoring and maintenance checks from the web hosting company's staff. All you have to do is sign up and everything else is taken care of on your behalf.

Co-location is perfect for companies who already have a skilled IT department on-site. On the other hand, managed hosting would be the perfect solution to companies that are not familiar with web hosting facilities and who don't have an IT department to assist in the management of servers. In addition, with managed hosting, the web host can afford to invest in greater security, antivirus and firewall equipment. The performance of machines is also monitored accurately so that if a failure does occur, the technical staff will be notified immediately. The customer also receives detailed performance reports which can be very useful when planning for future requirements. The decision as to which type of hosting you opt for should be based on what type of company you are and what your company's individual needs are.

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When opting for managed hosting you save on up front expenditure, spreading the cost in a more even way and gaining a quicker Return on Investment.Co-location allows you to buy physical rack space from a web hosting provider, along with a network and basic infrastructure, but you're able to manage and operate it from your own premises.