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5 Examples of Colocation

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Colocation is a data center that rents space, computing hardware and related services such as bandwidth, cooling, power, security and onsite support services. In some cases, colocation facilities are large dedicated data centers and in others they occupy a small but strategic space such as a floor of an office building in a financial district. The following are common examples of colocation.

Disaster Recovery

Organizations typically want their computing infrastructure to be geographically distributed for purposes such as resilience and disaster recovery. In the United States, it is common for organizations to distribute computing to both the East and West coast. In this context, colocation is far cheaper than owning your own facilities in different regions.

Small Business & Startups

Equipment rentals require little upfront capital and are ideal for small businesses and startups. Owning and operating a data center is also beyond the resources and capabilities of many mid-sized firms.

Content Delivery Network

Content delivery networks require a point of presence in a large number of physical locations close to end users. In this scenario, colocation is an attractive alternative to owning and operating a large number of data centers all over the world.

Internet Exchange Point

Colocation data centers are commonly used to set up internet exchange points whereby telecom providers and other entities such as content delivery networks set up links between their networks.


Colocation facilities located in close physical proximity to critical infrastructure and services such as stock exchanges may command a significant premium. High speed trading generally requires close proximity to the core infrastructure of an exchange.
Overview: Colocation
A data center that rents space, computing hardware and related services to a large number of customers.
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