A colocation centre or colocation center (also spelled co-location, colo, or coloc), is a type of data centre where equipment space and bandwidth are available for rental to retail customers. Colocation facilities provide space, power, cooling, and physical security for the server, storage, and networking equipment of other firms—and connect them to a variety of telecommunications and network service providers—with a minimum of cost and complexity.
Colocation has become a popular option for companies with midsize IT needs—especially those in Internet related business—because it allows the company to focus its IT staff on the actual work being done, instead of the logistical support needs which underlie the work. Significant benefits of scale (large power and mechanical systems) result in large colocation facilities, typically 4500 to 9500 square metres (roughly 50,000 to 100,000 square feet).
Colocation facilities provide, as a retail rental business, usually on a term contract:
They also provide redundant systems for, usually, all of these features, to mitigate the problems when each inevitably fails.
Among the economies of scale which result from grouping many small-to-midsized customers together in one facility are included:
Major types of colocation customers are: