Colocation Facility

What Does Colocation Facility Mean?

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.

Techopedia Explains Colocation Facility

Colocation providers make their services available in two ways:

  1. The customer buys hardware and physically brings it into the colocation facility.
  2. The provider buys and installs the server and other hardware equipment based on user requirements, then bills the customer at hand and continues to bill for monthly service.

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.


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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.