Co-location or collocation, in general, refers to the practice of placing multiple entities, whether related on unrelated, in the same site.

The term is co-location, however, most often specifically means server collocation. This refers to a data center that offers their clients an offsite storage space they need for their server needs.

A co-location center usually contains data from multiple companies that may be of a sensitive nature. Because of this, one of the most important features of a co-location center is security – security from hacking as well as from fire, theft, and hardware failure. To be able to provide this security co-location centers need to have high-tech facilities with high-tech equipment equipped with everything from temperature control to anti-static and anti-grounding wirings.
Making use of a data center is advantageous to most businesses. It is the cheaper alternative when compared to building and maintaining an in-house data center. An in-house data center will necessitate buying of needed equipment, space for that equipment, and more employees to ensure the servers are always online.

Co-located data centers harness scale and so are able to lower their prices. The facility is dedicated to servers, so fewer people are needed to man the servers of different companies. There’s just one building or building complex to maintain. Companies can take advantage of the service at a lower price and with less hassle. For that, they receive the same or even better level of service and security.