Costwise colocation is the most expensive of all the web hosting options that are currently available. This is because in colocation the client has to pay not only for the hiring of the rack space but also the price of assembling the server (the rights of which are retained by the client himself). A basic web hosting worthy server can cost anything between $2000 and $3000. Depending on the components that you choose that price can extend to well over $3000. Once you have the server, next are the software components that go into that. If you opt for open source technologies you will save a considerable amount of money which you can easily allocate for other purposes. The next cost is the rental charges of the rack space. Rack space denotes the space that the colocation data center allocates for your server. Rack spaces are usually available in full or half allocations. That means you can either opt for the full rack space or a half space depending on the size of your hosting server. The cost for setting up the rack space and the rental charges for one month will roughly cost around $600 and an equal amount for renewal every month.