Colocation (sometimes known as “colo”) is the practice of renting space for your servers and other computing hardware at a third-party provider’s data center facility. Typically, colocation services include the building in which everything is housed, as well as networking, physical security, redundant power and redundant cooling components, which then support the servers and storage provided by the customer.
Relying on a colocation data center allows you to eliminate the capital expenditures (CAPEX) of building and maintaining your own facility while allowing you to retain ownership and complete control of your physical servers. However, it still requires you to shoulder upfront hardware costs, and typically involves increased travel costs for your engineers in the event that they need to manually access the equipment.