Figure Out What You Actually Need Before You Choose a Data Center

If you’re looking at colocation, start with this question: what do you actually need?

Every week, I get calls and emails from AI startups, GPUaaS, hosting providers, bare metal resellers, and home lab enthusiasts trying to scale into something more commercial. The questions usually start the same way.

• “What’s your power rate?”
• “I have a 4U or 5U GPU rig. Can I ship it to you?”
• “What’s the cheapest electricity you can offer me?”

That’s where the conversation begins and, in many cases, where it ends.

Most aren’t asking the right questions yet. They’re focused on the price per kW (only), assuming that’s the main factor that matters. But not all colocation services are built for the same purpose. There’s a wide range of options, and the right one depends on your expectations - uptime, internet performance, support, and how much downtime you can tolerate.

Let’s get clear on when colocation makes sense, what kind of facility you actually need, and what you're signing up for when you chase price over reliability.

Option #1 - If You're Running Less Than 5 kW and IT Downtime Doesn't Matter

Keep it at home. It's the cheapest option, and you already have the space and power. You're paying for it anyway. You don’t need backup systems or a formal SLA. If the power or internet goes down, you’ll fix it yourself. And if you’re fine with the occasional reboot or outage, there’s no reason to spend more.

But understand what you’re working with. At home, you probably have one or two internet providers to choose from. Most of the time it’s residential cable or fiber. It’s cheap, but it's not reliable. You're on shared bandwidth with your neighbors. There’s no SLA. Support isn’t built for urgency. And if you ever plan to expose services publicly, your IP options and performance will be limited.

In a data center, you get multiple carriers, enterprise routing, low-latency options, and direct paths to internet exchanges. You also get more consistent performance and better support. But if that’s not a priority for you, then there’s no need to overthink it.

Option #2 - If You're Over 5 kW and Still Focused on Cost

Now you’re outside the range of most residential or office environments. You’re going to run into power delivery issues, cooling limitations, and reliability concerns if you keep your gear in-house. You’re at a scale where colocation starts to make sense.

If your only concern is price, you should be looking at distressed colocation sites or crypto-focused mining facilities. These exist all over the country - industrial buildings repurposed to cram in high-density equipment and deliver the lowest possible cost per kW.

They’re not built for uptime. Redundancy is minimal. Maintenance may be nonexistent. If a breaker trips or a cooling unit fails, your workload goes offline. It might take hours or days to come back up. There’s usually no SLA and limited support.

On the internet side, you’ll probably have better connectivity than what you’d get at home. You might have a couple options - likely local carriers or budget wholesale bandwidth. But it’s still not business-class. No redundant paths, limited routing optimization, and very little network engineering behind it. It might be good enough for basic use. It might even be fine for compute-heavy, bandwidth-light applications. But it’s not enterprise-grade.

If that level of service fits your needs, great. But don’t confuse it with what you get from a purpose-built data center. These are not the same thing.

Option #3 - If Uptime and Performance Actually Matter

This is the group we built TRG Datacenters for. If you’re running workloads where downtime costs you revenue, clients, or trust, you need to be in a facility designed to stay online.

We host AI companies that can’t afford retraining time. Hosting companies with customer SLAs. Healthcare platforms with strict compliance and uptime requirements. Financial services and eCommerce handling live transactions. Robotics and autonomous systems where latency and reliability aren’t optional.

When you operate in these environments, power and internet need to be dependable. Not “usually good” or “fine most of the time.” Actually dependable.

That means fault-tolerant power paths, backup systems that are tested and isolated, and facilities that can keep you online even when something breaks.

It also means carrier-grade connectivity. Diverse routes. Enterprise bandwidth options. Peering and transport flexibility. You don’t just get access to the internet - you get access to it with performance and routing that support production workloads.

The Difference Between Tier I and What We Do

Not all data centers are the same, and the Uptime Institute’s Tier levels define what you can expect.

• Tier I is the bottom. No redundancy. If the utility power goes out, so do you. Average downtime can hit 29 hours a year.
• Tier II adds some basic backup systems. It helps, but there are still single points of failure. Expect up to 22 hours of downtime annually.
• Tier III gives you concurrent maintainability. Every major system can be serviced without affecting your workloads. This is the baseline for most business-critical environments. Downtime drops to under 2 hours per year.
• Tier IV is fault tolerant. It can take full system failures and keep running. Less than 30 minutes of downtime a year, by design.

TRG Datacenters was built to Tier III/ Tier IV standards. Every core system is redundant. We’ve had 100% uptime since day one. We back that with a full-month 100% SLA - not just an hourly credit. If you go down because of us, you don’t pay that month.

Data Center Costs - You’re Not Just Paying for Power

People fixate on kW pricing, assuming we just pass along our utility rate with a margin. That’s not reality.

Power makes up about 29% of the cost of a high-reliability data center. The largest cost is the infrastructure needed to deliver that power safely and consistently. That includes generators, UPS systems, transfer switches, power distribution, cooling, and fire suppression. That’s 45% of the cost.

Another 13% is the land, building, and physical construction. And another 13% is operations - staffing, monitoring, maintenance, and support.

When you host at home or in a cheap facility, you're not accounting for any of that. That’s why the rate seems low. But once your gear is offline, the real cost shows up fast.

What We’re Not - Crypto Mining or Carrier Data Center

We’re not a cryptocurrency mining farm. We’re not operating out of a warehouse or container setup. We’re not a carrier data center designed just for cross-connects. We’re not an office building with some racks in the back room.

We’re an experienced colocation provider with purpose-built data centers. We designed and built our facility from scratch to deliver maximum uptime and performance.

We offer Colo+, a fully managed colocation service where we take care of setup, cabling, power, support, and monitoring. Remote hands are included. No surprise charges. No outsourcing. You ship your gear. We make it work and keep it running.

My Advice for You - Figure Out What You Actually Need Before You Choose a Data Center

If you’re just experimenting, chasing the lowest possible cost, or running workloads that don’t need to stay online, then go with the cheapest facility you can find. You’ll save money and learn a lot in the process.

But if you’re building something that customers depend on, you need to start thinking about what happens when things go wrong.

• If you go offline, who's there to help? Anyone?
• How long does help/resolution take?
• Can you afford to go down? How will it impact your business/project?
• What expectations do your customers and investors have?
• Can you afford to wait while someone figures it out or you go to the facility?

We’re not here to sell you something you don’t need. We’re here to be the right partner if reliability and performance matter to your business. If that’s where you are, let’s talk.

We Make It Easy - All Inclusive Colocation Packages for NVIDIA GPUs

Running high-density workloads with NVIDIA GPUs like the DGX H100, H200, or HBX G200 Blackwell? We make it easy with our all inclusive colocation packages.

TRG Datacenters now offers a purpose-built, all-inclusive colocation package starting at $2,277/month per unit. This includes a 10kW A+B redundant power circuit, Colo+ fully managed colocation, free cross connects, and 24/7 remote hands-on support at no extra cost. No setup or install fees - just simple, predictable pricing backed by our 100% uptime SLA and flawless reliability track record.