A colocation data center, or ‘colo,’ is any large physical datacenter facility that rents out rack space to third parties for their servers or other network equipment. This is a very popular service that is used by businesses that may not have the resources needed to maintain their own data center, but still want to enjoy all the benefits.

A colo offers space with the proper power, cooling and security to host businesses’ computing hardware and servers. This capacity includes anything from cabinets to cages or private suites.

Often, colo providers lease space to various tenants – including network providers, cloud providers, and enterprises. These tenants can then interconnect to one another within the colocation data center and do business together. This allows businesses to centralize their IT operations and create an efficient architecture that can reduce costs.