A colocation (colo) is a facility in which businesses can rent space for servers and other computing hardware.
The colo typically provides the building, cooling, power, bandwidth and physical security while the customer provides compatible servers, storage and networking equipment. Besides basic space rental, many colos extend their services to include leasing for equipment, network and server monitoring tools, power, redundancy and backup systems. In general, collocation is moving or placing things together, sometimes implying a proper order.
There are several reasons a business might choose a colo over building its own data center. Some
enterprises use a colo for disaster recovery and redundancy, to host a customer-facing website or
for a testing environment for new projects. Or a a Web site owner could place the
site's own computer servers on the
premises of the Internet service provider (ISP). Or an ISP could place
its network routers on the
premises of the company offering switching services with other ISPs. The alternative to collocation
is to have the equipment and the demarcation point located at the customer's premises.