Colocation Centre explained

A colocation centre (collocation center) ("colo") or carrier hotel is a type of data center where multiple customers locate network, server and storage gear and interconnect to a variety of telecommunications and other network service provider(s) with a minimum of cost and complexity.

Increasingly organizations are recognizing the benefits of colocating their mission-critical equipment within a data centre. Colocation is becoming popular because of the time and cost savings a company can realize as result of using shared data centre infrastructure. Significant benefits of scale (large power and mechanical systems) result in large colocation facilities, typically 4500 to 9500 square metres (roughly 50000 to 100000 square feet). With IT and communications facilities in safe, secure hands, telecommunications, internet, ASP and content providers, as well as enterprises, enjoy less latency and the freedom to focus on their core business.

Additionally, customers reduce their traffic back-haul costs and free up their internal networks for other uses. Moreover, by outsourcing network traffic to a colocation service provider with greater bandwidth capacity, web site access speeds should improve considerably.

Major types of colocation customers are:

  • Web commerce companies, who use the facilities for a safe environment and cost-effective, redundant connections to the Internet
  • Major enterprises, who use the facility for disaster avoidance, offsite data backup and business continuity
  • Telecommunication companies, who use the facilities to interexchange traffic with other telecommunications companies and access to potential clients
Most network access point facilities provide colocation hosting.

Services offered

Most colocation centres offer different types of services to customers ranging from dedicated suites/rooms or to smaller racks or partial racks.Some colocation centres also offer some degree of service level agreements to support a wide range of computer and network related services, for example, server reboots, hardware replacements and software updates.

There are a few key differences between a dedicated server and colocation servers. Dedicated servers tend to be owned and rented out, while a colocation server is one that the client owns.

Confusingly, one company can operate a colocation centre, another can provide the bandwidth, whereas a third company would rent a cage inside the centre, renting out racks to hosting providers which would rent the servers themselves to actual clients. Any and all of those companies will claim ownership of the facility and will feature photos and descriptions of it on their web sites. At the actual physical location various ID cards with various logos will be present, including those of the company that built/rents/owns the actual building.


  • Empty pipe fire suppression of some sort, and/or VESDA
  • Relay racks, cabinets or cages to mount servers into.

Physical security

Most colocation centres have high levels of physical security. They may be guarded 24/7. They may be secured with closed-circuit television camera.

Some colocation facilities require that employees escort customers, especially if there are not individual locked cages/cabinets for each customer. In other facilities, a card access system may allow customers access into the building, and individual cages/cabinets have locks.


Colocation facilities generally have generators that start up automatically when utility power fails, usually running off diesel fuel (though natural gas is probably also possible). These generators may have varying levels of redundancy, depending on how the facility is built.

Generators do not start up instantaneously, so colocation facilities usually have battery backup systems. In many facilities, the operator of the facility provides large inverters to provide AC power from the batteries. In other cases, the customers may install smaller UPSes in their racks.

Some customers choose to use equipment that will run directly off 48VDC (nominal) battery arrays. This may provide better energy efficiency, and may reduce the number of parts that can fail.

An alternative to batteries is a motor generator connected on a shaft to a flywheel and a diesel engine.

Many colocation facilities can provide A and B power feeds to customer equipment, and high end servers and telecommunications equipment often can have two power supplies installed.

Colocation facilities are sometimes connected to multiple sections of the utility power grid for additional reliability.


The operator of a colocation facility generally provides air conditioning for the computer and telecommunications equipment in the building. The cooling system generally includes some degree of redundancy

In older facilities, the capacity of the cooling system often limits the amount of equipment that can operate in the building much more than the available square footage.

Internal connections

Colocation facility owners have differing rules regarding cross connects between their customers. These rules range from allowing customers to run such connections at no charge, to allowing customers to order such connections for a steep monthly fee, to allowing customers to order cross connects to carriers but not to other customers.

Some colocation centres feature a "meet-me-room" where the different carriers housed in the centre can efficiently exchange data.

Most peering points sit in colocation centres.

Because of the high concentration of servers inside larger colocation centres, most carriers will be interested in bringing direct connections to such buildings.

In many cases there will be a larger Internet Exchange hosted inside a colocation centre, on which customers can connect for peering.

External connections

Colocation facilities generally have multiple locations for fiber optic cables to enter the building, to provide redundancy so that communications can continue if one bundle of cables is damaged.

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