Definition of Co-location

Co-location, in the context of technology, refers to the practice of housing privately-owned servers and network equipment in a third-party data center. This allows companies to share resources like power, cooling, and connectivity with other clients while maintaining control over their server hardware and software. The primary benefits of co-location are increased reliability, security, and cost efficiency compared to hosting servers in-house.


The phonetics of the keyword “Co-location” would be: /koʊˌloʊˈkeɪʃən/

Key Takeaways

  1. Co-location facilitates better communication and collaboration among team members by placing them in the same physical space.
  2. It can lead to faster problem-solving and decision-making, as face-to-face interactions often result in quicker resolutions than online communication methods.
  3. Despite its benefits, co-location can also lead to distractions and noise in an open working environment, which may negatively affect productivity for some individuals.

Importance of Co-location

Co-location is an important technology term because it refers to the practice of housing multiple servers and networking equipment in a single, shared data center facility.

This allows businesses and organizations to leverage the infrastructure, security, and connectivity provided by the data center while reducing costs and improving performance.

By colocating their equipment, companies can benefit from economies of scale, access to advanced technologies and reliable bandwidth, enhanced security measures, and the expertise of on-site professionals handling maintenance and upgrades.

Furthermore, co-location helps reduce latency and ensures business continuity with multiple power and cooling redundancies, ultimately leading to a more efficient and resilient IT environment for the end-users.


Co-location is a valuable solution employed by numerous businesses, allowing them to place their server and related networking equipment in a third-party data center. The core purpose of co-location is to provide enhanced physical security, improved network connectivity, as well as a reliable infrastructure that ensures uninterrupted power, cooling, and environmental control for the hosted equipment. When a business opts for co-location, it leases space within the facility—such as an individual rack or closed-off cage—granting them the freedom to manage and maintain their own hardware.

In doing so, not only do they benefit from the robust data center infrastructure, but they can also tap into faster data transfer speeds by connecting to the data center’s network infrastructure, potentially improving the performance of their online applications and services. Apart from its clear technological advantages, co-location can serve various strategic purposes for businesses. By placing their critical IT infrastructure in a data center, companies can effectively reduce the expenses and complexities of managing an in-house data center—costs that might include real estate, physical security, electricity, and cooling systems.

This, in turn, allows the organization to redirect resources to its core competencies and invest in innovation. Moreover, businesses with global ambitions may choose to utilize multiple co-location data centers spread across the world to meet the stringent compliance, data sovereignty, and low-latency requirements that might not be achievable otherwise. In this way, co-location provides businesses with the flexibility, resilience, and scalability they need to evolve in a fluctuating digital environment.

Examples of Co-location

Data Center Co-location: Data center co-location is a common example of co-location technology, where businesses lease space within a third-party data center facility to house their servers, storage, and networking equipment. The data center company retains responsibility for the infrastructure, power, cooling, and physical security, while customers take care of their own hardware and software. This arrangement offers cost savings, increased bandwidth, enhanced security, and greater flexibility for businesses. Examples of co-location data center providers include Equinix, Digital Realty, and Global Switch.

Telecommunication Co-location: Telecommunication co-location is a popular practice among telecom providers which involves sharing infrastructures such as towers, fiber optic cables, and other equipment. This helps to reduce costs and accelerate network deployment. It allows service providers to extend coverage and improve network reliability while minimizing environmental impact. For example, major carriers like AT&T, Verizon, and T-Mobile may co-locate their cell towers to strengthen signal reach and provide more reliable service.

Research & Educational Co-location facilities: Research and educational institutions often use co-location technology to set up shared resources in high-performance computing, data storage, and networking. It allows researchers from different institutions to collaborate on complex projects and access state-of-the-art equipment and resources. An example is the Massachusetts Green High Performance Computing Center (MGHPCC), a joint initiative between several universities, which features a co-located data center for research computing, providing a shared infrastructure that supports a range of scientific research objectives.

Co-location FAQ

What is co-location?

Co-location refers to the practice of renting space for your server equipment in a data center. By placing your server in a secure facility with a high-speed internet connection, better security, and professional management, you can improve the performance, reliability, and security of your server infrastructure.

What are the benefits of co-location?

Some benefits of co-location include access to higher bandwidth, improved security, better power redundancy, and lower latency. Additionally, it enables you to focus on your core business while IT infrastructure management is handled by professionals.

How does co-location pricing work?

Co-location pricing varies based on the provider and your requirements. Pricing factors often include space rented (measured in rack units or cabinets), power usage, network bandwidth, and additional services such as remote hands or managed services.

How do I manage my server equipment in a co-location facility?

Co-location facilities typically give customers varying degrees of access to manage their equipment. You can visit the data center for hands-on management, or use remote hands services, where data center staff perform tasks as needed on your behalf. Many providers also offer remote management tools to monitor and manage your server equipment from your location.

How secure are co-location facilities?

Co-location facilities prioritize security by implementing multiple layers of access control, surveillance cameras, alarm systems, and on-site security personnel. Additionally, facilities may have fire suppression systems, backup power supplies, and environmental controls to ensure the safety and longevity of your server equipment.

Related Technology Terms

  • Data Center
  • Server Rack
  • Network Infrastructure
  • Redundant Power Supply
  • Offsite Backup

Sources for More Information


About The Authors

The DevX Technology Glossary is reviewed by technology experts and writers from our community. Terms and definitions continue to go under updates to stay relevant and up-to-date. These experts help us maintain the almost 10,000+ technology terms on DevX. Our reviewers have a strong technical background in software development, engineering, and startup businesses. They are experts with real-world experience working in the tech industry and academia.

See our full expert review panel.

These experts include:


About Our Editorial Process

At DevX, we’re dedicated to tech entrepreneurship. Our team closely follows industry shifts, new products, AI breakthroughs, technology trends, and funding announcements. Articles undergo thorough editing to ensure accuracy and clarity, reflecting DevX’s style and supporting entrepreneurs in the tech sphere.

See our full editorial policy.

More Technology Terms

Technology Glossary

Table of Contents