A colocation data center, also known as a "colo," is a type of data center where equipment, space, and bandwidth are available for rental to retail customers. In a colocation data center, servers and other equipment from many different companies are "co-located" in one data center, and the hardware is usually owned by the companies themselves and simply housed (and sometimes maintained) by the data center staff. Colocation facilities provide space, power, cooling, and physical security for the server, storage, and networking equipment of other firms and also connect them to a variety of telecommunications and network service providers with a minimum of cost and complexity.

Colocation data centers come in a few different types, including retail and wholesale, and hybrid cloud-based colocation facilities. In a retail colocation, a customer leases space within a data center, usually a rack, space within a rack, or a caged off area. In a wholesale colocation, a tenant leases a fully built data center space, generally at a cheaper rate than retail vendors, but with lower power and space requirements.

Colocation data centers offer several benefits, including cost savings, physical security, and protection against cyberattacks. By deploying IT assets in a colocated data center, an organization can take advantage of a number of benefits compared to an on-premises data center, including improved cost, scalability, and reliability. In a colocation data center, an organization can own and control its own physical assets, including computers and network hardware, and is wholly responsible for managing and securing its complete infrastructure stack.

In summary, a colocation data center is a type of data center where equipment, space, and bandwidth are available for rental to retail customers. It provides space, power, cooling, and physical security for the server, storage, and networking equipment of other firms and also connects them to a variety of telecommunications and network service providers with a minimum of cost and complexity. Colocation data centers offer several benefits, including cost savings, physical security, and protection against cyberattacks.