In general, colocation is moving or placing things together. In technology, colocation is the renting of physical space in a service provider’s data centre premises.
Data centre colocation allows an organisation to save money by housing and running parts of its IT infrastructure off-site instead of building and managing an in house data centre. For example, a business might colocate its corporate servers; colocation, as opposed to managed hosting or dedicated hosting, describes an arrangement where the hardware and software remain owned and managed by the business but is housed in a service provider’s datacentre to reduce overhead costs incurred by things like cooling, power, physical security, insurance and connectivity . Colocation providers also provide technical monitoring and physical support which is called “remote hands and eyes” which saves the organisation having to attend site for routine or emergency tasks.
Colocation can also be spelled “colocation”, “collocation” or “co-location” and abbreviated as “colo”.