What is a colocation data center?

What a colocation data center is

A colocation data center is a building that a provider owns and operates for many tenants. The provider supplies the structure, the power, the cooling, the security, and the network connections. Each customer rents a share of that capacity and installs its own servers.

Customers such as businesses, government agencies, cloud providers, and network carriers share one building instead of each building their own.

How colocation works

Colocation works as a lease of capacity, not a lease of land. The customer pays for space and for the power its equipment draws. The provider keeps the building running, maintains backup power, and connects customers to carriers inside the building.

Many customers value that interconnection as much as the space. Networks meet under one roof, so data moves between them over short, direct links.

Retail and wholesale colocation

Retail and wholesale colocation differ in how much each customer leases.

• Retail colocation. A customer rents a rack, a few racks, or a caged area. The provider handles most of the services, and the customer handles its servers.
• Wholesale colocation. A customer leases a whole room, a floor, or a building. The customer takes on more of the operation and signs a longer, larger lease.

Retail facilities hold many small tenants. Wholesale facilities hold fewer, larger ones. A provider can serve both kinds of customer on one campus.

How colocation differs from hyperscale

Colocation serves many customers, and hyperscale serves one. A hyperscale campus is designed around a single operator’s load and growth plans. A colocation facility is designed to be leased in pieces, so the provider carries the risk of filling it.

The line can blur. A wholesale lease of a whole building to a large cloud company can look much like a hyperscale deployment. See hyperscale data center.

What colocation developers look for in a site

Colocation developers look for fiber, power, and nearness to the customers they plan to serve.

• Fiber. Several carriers on separate routes, because interconnection is part of what the provider sells. See fiber route diversity.
• Power. A utility that can serve the first building now and later phases on a known schedule. See data center power requirements.
• Location. A site within reach of the businesses that will lease space, often near a metro area.
• Zoning. A district that allows the use, or a clear path to approval.
• Access. Roads that let staff, customers, and equipment reach the building.

Retail colocation tends to favor smaller sites close to customers. Wholesale colocation can accept larger sites farther out, where power and land are easier to secure.

What the public record shows

The public record shows zoning, parcel boundaries, nearby transmission, and fiber routes where carriers publish them. It cannot show a utility’s capacity for the load, a carrier’s willingness to build a connection to the site, or local demand for leased space.

The utility, the carriers, and the developer’s own market study answer those questions. We read the record and mark what it leaves open. See what we check for fiber.

Questions

Who uses a colocation data center?

Businesses, government agencies, cloud providers, and network carriers use colocation when they want data-center capacity without owning a building.

Is colocation the same as cloud computing?

No. In colocation, the customer owns its servers and rents space and power. In cloud computing, the customer rents computing from a provider that owns the servers.

Does a colocation site need as much land as a hyperscale campus?

Often not. Many colocation facilities fit on smaller sites than a hyperscale campus, but a large wholesale campus can approach hyperscale size.