Colocation is a new kind of cloud hosting where you own the hardware but the rest of the infrastructure is owned and operated by someone else, usually a service provider. In other words, you buy the computer hardware, the server, and drop it off at a physical location that isn’t your business. You share bandwidth and other resources with other hardware owners.

How does this benefit you?

First, it cuts down on overhead. The less physical space you need to host your hardware the less expense you’ll have in maintaining that hardware. The cost of overhead is shared with other colocators.

Secondly, you save costs on other infrastructure requirements such as bandwidth and possibly software. Many colocation services provide software and application support whereas many more offer only a place to store your hardware and take care of the maintenance for you. Some colocation services only provide you with space for your hardware needs but you’ll need to provide the IT support for ongoing maintenance.

Colocation is a new type of service that allows companies who outgrow their IT needs to grow further without large overhead expenses.