What is Colocation? A Complete Guide
Everything you need to know about server colocation, how it works, and why it might be the ideal infrastructure solution for your business.
Definition of Colocation
Colocation (often abbreviated as "colo") is a data center service where businesses rent space to house their own servers, storage, and networking equipment in a professionally managed facility. The colocation provider supplies the building, cooling, power, bandwidth, and physical security, while you maintain ownership and control of your hardware.
How Colocation Works
When you use colocation services, the process typically works as follows:
- Choose your space - Select the amount of rack space (measured in rack units or "U") or a private cage that fits your equipment.
- Ship or install equipment - Transport your servers and networking gear to the facility and install them in your allocated space.
- Connect to the network - The provider connects your equipment to their network infrastructure, giving you high-speed internet access.
- Manage remotely - You manage your servers remotely via SSH, RDP, or out-of-band management tools. You can also visit the facility for hands-on maintenance.
What the Provider Supplies
Physical Space
Rack space, cabinets, or private cages in a secure facility
Power
Redundant power feeds, UPS systems, and backup generators
Cooling
Precision cooling systems to maintain optimal server temperatures
Bandwidth
High-speed internet with multiple carrier options
Physical Security
24/7 guards, biometric access, video surveillance
Fire Suppression
Advanced fire detection and suppression systems
What You Provide
- Your own servers and hardware
- Operating system and software management
- Application deployment and monitoring
- Data backup and disaster recovery planning
- Security configuration (firewalls, encryption, etc.)
Ad Space - 300x250
Types of Colocation Space
Shared Rack Space
Ideal for small deployments, you rent a portion of a rack (e.g., 1U to 10U) shared with other tenants. This is the most affordable option, starting at around $50-200/month per U.
Full Rack
A standard 42U rack dedicated entirely to your equipment. Provides more space and power capacity, typically $500-2,000/month depending on power and location.
Private Cage
A fenced, lockable enclosure within the data center containing multiple racks. Ideal for larger deployments requiring enhanced security and privacy. Typically 4+ racks.
Private Suite
A dedicated room within the facility with its own walls, door, and potentially its own cooling. Reserved for enterprise-scale deployments.
Who Uses Colocation?
- Small and medium businesses that need reliable infrastructure but can't justify building their own data center
- Enterprises looking to reduce on-premises footprint or expand into new regions
- SaaS companies needing high-performance dedicated hardware
- Financial services requiring low-latency connectivity and compliance
- Healthcare organizations needing HIPAA-compliant hosting
- Gaming and streaming companies requiring dedicated high-performance infrastructure
Next Steps
Now that you understand what colocation is, explore these related guides: