What is Colocation?
Colocation means placing servers you own in rented space inside a third-party data centre. The facility supplies power, cooling, physical security and a network connection; you keep ownership of the hardware and software. It suits teams that already own servers; teams without hardware usually rent a dedicated server instead.
For IT teams with their own servers weighing colocation against renting a dedicated server or moving to the cloud.
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- Read time
- 4 min
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- 7
- Updated
- 14 Nov 2026
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- WebJi® team
Last editorial update: 14 November 2026. Prices follow the dated sources on this page; checkout confirms current charges.
What colocation means: your hardware in rented space
Colocation (often shortened to “colo”) means placing servers you own in rented space inside a third-party data centre, which supplies power, cooling, physical security and network connectivity while you keep ownership and control of the hardware and software. The operator does not supply or replace your server; it supplies a safe, powered, connected place for it.
- You own the hardware: servers, storage and network gear are yours, bought and shipped by you.
- They own the building: power, cooling, fire suppression and access control stay with the operator.
- You rent a footprint: rack units, a cabinet or a cage, plus power and a network port.
In hosting, colocation has nothing to do with the English word “collocation”, two words that habitually go together. The building itself is explained in what a data centre is.
What a colocation facility supplies
A colocation facility supplies four things: conditioned power, cooling, physical security and a network connection, sold by the rack unit, cabinet or cage.
| Service | What it covers | How it is usually billed |
|---|---|---|
| Space | Rack units (1U = 1.75 in / 44.45 mm), a full cabinet (commonly 42U) or a locked cage | Per U, per cabinet or per cage |
| Power | Utility feeds backed by UPS and generators, ideally two independent A/B feeds | Per circuit or per committed kW |
| Cooling | Keeping the hall within the temperature range hardware is rated for | Included in space or power pricing |
| Network | A port on the operator's network, or a cross-connect to a carrier you choose | Per port, per Mbps or per cross-connect |
| Remote hands | On-site staff who do physical tasks you request | Per hour or a monthly block |
A 2U server uses two rack units, not a whole cabinet, so a small deployment can rent only the space it fills.
Colocation vs dedicated server vs cloud
In colocation you own the server and rent the space; with a dedicated server the provider owns the machine and rents it to you whole; in the public cloud you rent capacity on hardware you never see.
| Colocation | Dedicated server | Public cloud | |
|---|---|---|---|
| Server owner | You | The host | The cloud vendor |
| What you pay for | Space, power, cooling, network | The whole machine, monthly | Capacity, often per hour |
| Hardware failure | You buy and ship the replacement part | The host replaces it | The vendor moves or replaces the instance |
| Up-front cost | High: you buy the hardware | None | None |
| Operating system | You | You, or the host on a managed plan | You, for the guest |
The full trade-off is in colocation vs dedicated server, and the rented-machine option in what a dedicated server is.
Retail, cage, wholesale and hybrid colocation
Colocation is sold in sizes: retail (a few rack units or one cabinet), cages (a locked area in a shared hall), wholesale (a private suite with a large power commitment) and hybrid (colo racks linked privately to your office or a cloud).
A typical small example: a company buys a 2U server, ships it to the facility, and on-site staff mount it and connect power and one network port. The company's administrator then manages it remotely from the office. A virtual machine with no box of your own is not colocation; that is cloud or VPS hosting. Linking colo to cloud is explained in hybrid cloud hosting.
What to check before signing a colocation contract
Check the power design, the power you are allowed to draw per rack, network choice, access rules, the uptime terms and every recurring fee before signing. These details, not the rack price, decide whether colo suits you.
- Redundancy level: the Uptime Institute's Tier Standard ranges from Tier I (basic capacity) to Tier III (concurrently maintainable: any component can be serviced without shutting down IT load) and Tier IV (fault tolerant). Ask whether a tier is certified or only claimed.
- A/B power: two independent feeds to your rack, so a single circuit failure does not drop dual-power-supply servers.
- Power density: the kW per rack allowed; modern servers can exceed what older halls supply.
- Carrier neutrality: whether you can buy bandwidth from several carriers and what each cross-connect costs.
- Access: how staff and visitors are authorised, and the hours you can visit.
- SLA and remote hands: the written uptime commitment, credits, and response times for on-site tasks.
Local options are discussed in data centres in Jaipur.
How IPMI and remote hands manage a colocated server
You manage a colocated server remotely through its out-of-band controller, IPMI or a vendor equivalent such as iDRAC or iLO, which gives power control, console and hardware sensors even when the operating system is down. Keep that port on a private management network or VPN, never open to the internet.
Remote hands are the facility's on-site staff. They do physical work you describe, such as reseating a drive, swapping a labelled cable or power-cycling a server whose management port is unreachable. They are not your system administrators unless a separate contract says so, so ask what a visit includes, how you authorise it and what it costs.
Who colocation suits, and when a dedicated server is simpler
Colocation suits teams that already own servers, have someone to administer them, and need data-centre power, cooling and security rather than an office cupboard; for everyone else a rented dedicated server is simpler. It also suits a disaster-recovery site when rules require equipment off your own premises.
It is a poor fit if you have no hardware, nobody to patch the operating system, or no budget to replace failed parts quickly. WebJi® does not offer walk-in colocation cages or publish a colocation price. Instead, WebJi® dedicated servers start at ₹4,999 a month plus GST for a Xeon-class machine with 32 GB RAM, RAID storage and IPMI, so you get single-tenant hardware without buying it; checkout confirms the price. Managed dedicated servers add OS care. Questions go to the WebJi® team in Jaipur.
Frequently asked questions
What is the difference between a data centre and colocation?
A data centre is the building that houses computing equipment. Colocation is one service sold inside it: renting space, power and connectivity for hardware you own. The same building may also run the operator's own cloud or dedicated servers.
Is colocation cheaper than cloud?
It can be for steady, predictable workloads over several years, because you buy the hardware once and pay mainly for space and power. It is usually dearer for small or variable workloads once you add hardware purchase, spares, replacement time and staff.
Can I colocate a desktop PC or a tower server?
Some facilities accept tower servers on a shelf for a higher fee, but most require rack-mountable equipment with rails. A desktop PC is rarely accepted because of its power supply, cooling design and lack of remote management.
Who is responsible if my colocated server's disk fails?
You are. You supply the replacement part, and remote hands install it if you have booked that service. That is why colo customers keep spare disks on site and run RAID, while dedicated-server customers leave replacement to the host.
Last editorial update: 15 November 2026. Prices follow the dated sources on this page; checkout confirms current charges.
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