The Co-location business model continues to grow, but at a diminished rate. They never were designed to provide a high level of customer service or quality of service. In fact many of the Goliath collocation companies do not even offer a live person for technical help. Managed Hosting Solutions have begun to erode the dominance of the collocated model. Since collocation companies provide nothing more than pipes and power it will very quickly move to a commodity item.
Competition demands that companies focus on their core competencies or die.
In the last few years, businesses have seized the opportunity to use the Internet to enable B2B functions, disintermediate the value chain and as a vehicle for internal communications and processes. There are even companies whose sole existence depends on their Internet presence being up and running. The challenge has been recruiting quality staff during these technology boom times. That's where managed hosting really outshines collocation models. With the functional use of the Internet expanding daily, a new hosting model emerged to better suit these developments.