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A colocation facility is a physical data center hosting facility that allows customers to deploy their own servers, networks and storage hardware powered by Internet bandwidth, electricity, backup power and other services generally required in a data center.
Colocation facilities are built capitalize on the economies of scale achieved through shared bandwidth, power and disaster resistant facilities. In colocation facilities, customers only own the server and related hardware and procure all other services based on a monthly billing cycle.
Colocation providers make their services available in two ways:
Colocation providers generally have the facilities to host thousands of servers, powerful standby generators and uninterrupted power supply, disaster recovery and backup procedures. They also have industry standard certifications like typical hosting providers.