Data Center Colocation

Definition of Data Center Colocation

Data center colocation refers to the practice of renting out space, power, cooling, and connectivity within an existing data center facility for housing servers and other hardware equipment. Companies choose colocation to take advantage of cost savings, improved reliability, and access to advanced infrastructure without needing to build and manage their own data centers. This allows businesses to focus on their core operations while benefiting from secure, scalable, and reliable IT infrastructure.


The phonetic transcription for the keyword ‘Data Center Colocation’ is:/ˈdeɪtə ˈsɛntər ˌkoʊloʊˈkeɪʃn/

Key Takeaways

  1. Data Center Colocation offers businesses a cost-effective solution for housing their critical IT infrastructure, providing physical security, power, cooling, and network connectivity.
  2. Colocation facilities allow companies to share resources with other businesses in the data center, which can lead to greater scalability, connectivity, and uptime.
  3. Opting for colocation services can enable companies to focus on their core business operations, while outsourcing the management of their IT infrastructure to experts in the field.

Importance of Data Center Colocation

Data Center Colocation is important because it allows businesses to cost-effectively leverage the resources and infrastructure of a professionally managed data center to support their IT operations and securely store their data.

It enables organizations to focus on their core business functions without having to invest significantly in building and maintaining their own data center facilities.

Colocation also provides better bandwidth, improved reliability, enhanced disaster recovery options, and greater scalability to accommodate growth.

Additionally, sharing such a facility reduces environmental impact and contributes to more efficient utilization of resources, making data center colocation a viable, strategic choice for businesses.


Data center colocation serves a vital purpose in today’s increasingly connected and digital world, as it offers businesses and organizations an efficient and cost-effective solution for housing their IT infrastructures. At its core, colocation provides a secure, scalable and reliable environment for a company’s servers, storage devices, and network equipment.

By placing their mission-critical hardware inside facilities operated by specialized providers, companies can focus on their core business operations, while also benefiting from reduced operational costs, robust connectivity options, and access to cutting-edge technologies to better manage and maintain their systems. One of the primary purposes of data center colocation is to ensure the stability and performance of a company’s IT infrastructure.

Colocation providers offer redundant power supplies, cooling systems, and advanced security measures to protect against unforeseen issues such as power outages and natural disasters. Alongside the enhanced physical safety, data center colocation facilities offer a variety of network connectivity options, allowing businesses to benefit from faster internet speeds and improved data transfer capabilities.

By leveraging these key aspects, businesses can maintain a more efficient and effective IT infrastructure while also avoiding the heavy investments typically associated with building and managing in-house data centers. As a result, data center colocation remains a popular choice for businesses seeking a dependable and scalable solution for managing their computing resources.

Examples of Data Center Colocation

Equinix Data Center Colocation: Equinix is a global data center and colocation provider offering services in 68 locations across 26 countries. They provide businesses with secure and reliable data center facilities for housing their IT infrastructure, reducing the need for companies to invest in their own physical data centers. For example, leading content delivery network provider, Cloudflare, uses Equinix for colocation services to manage its global network.

Digital Realty Data Center Colocation: Digital Realty is another major player in the data center colocation market, operating over 290 facilities in 24 countries. Their colocation services are used by companies like IBM and LinkedIn for their mission-critical IT infrastructure. In addition, Digital Realty provides secure, interconnected environments for companies to support hybrid cloud strategies and improve overall data management.

Rackspace Technology Colocation: Rackspace Technology is a managed cloud computing company that also offers colocation services to businesses of all sizes. They operate highly secure data center facilities across the globe, providing an environment for companies to house their IT infrastructure without the need to invest in their own data centers. For example, Rent-A-Center, a rent-to-own retailer in the US, leveraged Rackspace colocation services to consolidate its data center footprint to improve reliability, security, and reduce costs.

Data Center Colocation FAQ

1. What is Data Center Colocation?

Data Center Colocation is a service where businesses rent space in a third-party data center. This allows them to place their servers and network equipment in a secure, reliable, and high-capacity environment. Colocation facilities provide power, cooling, security, and bandwidth – allowing businesses to focus on managing their IT resources without worrying about the infrastructure.

2. What are the benefits of Data Center Colocation?

Benefits of Data Center Colocation include cost savings, increased security, improved network reliability, scalable infrastructure, and access to expert support. Companies can avoid the high costs of building and maintaining their own data centers while still maintaining control over their equipment. It also ensures better uptime for critical IT services and the ability to grow as needed.

3. How does Data Center Colocation pricing work?

Data Center Colocation pricing varies based on several factors such as space, power, and bandwidth requirements. Providers may offer pricing based on rack units (RU), cabinets, or private cages. Additional costs may be incurred for services such as remote hands, monitoring, and technical support. It’s important to understand your specific requirements and compare pricing options from different providers to select the best option for your business.

4. How do I choose the right Data Center Colocation provider?

Factors to consider when choosing a Data Center Colocation provider include location, connectivity options, security, redundancy, and support services. Look for a provider with a reputable track record, carrier neutrality, and scalability options. It’s also essential to review service level agreements (SLAs) to ensure that your performance and uptime requirements are met.

5. What is the difference between Data Center Colocation and Cloud services?

Data Center Colocation involves renting physical space in a data center to house your own servers and equipment, while Cloud services allow you to rent virtual resources provided by a cloud service provider. With colocation, you maintain control over your hardware and software configuration, while cloud services typically offer a more managed hosting experience. Each option has its benefits depending on your business needs and IT infrastructure management capabilities.

Related Technology Terms

  • Data Center Infrastructure
  • Carrier Neutrality
  • Remote Hands Services
  • Power Redundancy
  • Environmental Controls

Sources for More Information


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