A Colocation Provider is a data center that enables clients to store their servers in the supplier’s rack and share bandwidth as their own.

Storing servers with a colocation provider is more cost-effective than keeping them on the customer’s premises. With this arrangement, customers retain the autonomy to install their own servers and equipment in a rack offered by the data center. The data center then provides an IP address, bandwidth and power to the server.

In addition to the relatively low bandwidth cost, companies who use a colocation provider generally enjoy better outage protection and additional security. And because the server equipment and software is owned by each colocation customer, they’re never at the mercy of their provider to install, upgrade or implement critical fixes to their software.

Some colocation providers may offer services to manage and maintain their customers’ servers for an added cost. This option may be especially attractive for users who do not have an IT staff, or for companies whose offices are located far from the colocation provider.