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Locating customer equipment in a third-party datacenter. Colocation often refers to Internet service providers (ISPs) or cloud computing providers that furnish the floor space, electrical power and high-speed links to the Internet for a customer's Web servers. Colocation eliminates having to build a secure facility that provides power and air conditioning for company-owned servers. In addition, colocation centers are often located near major Internet connecting points and can provide access to multiple Tier 1 Internet backbones. Although most equipment monitoring is performed remotely by the customer, a colocation datacenter may offer equipment maintenance and troubleshooting arrangements.

Other Colocation Scenarios
The term stems from the telephone industry when one telco would house the equipment of another to facilitate interconnections. Another type of colocation could be a computer distributor or online retailer who locates its warehouse within a PC manufacturer's facility to improve turnaround time to customers. Contrast with managed services. See cloud computing and ping power pipe.

Colocation Earns Millions

High-frequency trading firms are able to colocate their servers next to the servers on the stock exchange floors to reduce travel time in executing orders. According to the July 2, 2010 issue of "THE WEEK" magazine, and as extraordinary as it may seem, studies revealed that shaving one millisecond from every trade could be worth USD $100 million to a high-speed trading firm over the course of a year.
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References in periodicals archive ?
The combined offering will provide fully managed hybrid cloud infrastructure delivered as a Service and deployed in customers' data centres or co-location facility.
The S9s are planned to operate at a co-location facility located in Montreal, Quebec, Canada, where the all-in cost of operating the miners, inclusive of electricity, rent, cooling, general rig maintenance and management, is estimated to be about USD0.10 per kilowatt hour.
The regulatory probe into NSE's co-location facility has already taken a toll on its proposed IPO, which is supposed to be completed before the end of the current calendar year.
London -- High-Performance Compute (HPC) co-location facility Aegis Data has announced a strategic alignment with cloud infrastructure and services provider vScaler to host its cloud environment within its data centre.
The HFT's co-location facility at each exchange is connected to its colocation facility at every other exchange by specialized fiber-optic cables, which permit extremely rapid communication among the HFT's co-location facilities at the different exchanges, all of which have their matching engines in northern New Jersey.
For instance, if we have a CloudFront location that is in a co-location facility in some country, we require the co-location provider to give the exact same security requirements that we do.
In Birmingham, the expansion adds 127 miles of dark fiber and 42 on-net buildings to its metro network, while connecting to the existing carrier neutral and enterprise co-location facility.
Managing white space will be particularly helpful to a large or co-location facility for determining how much is left, if the data center can handle another client, at what rate is the data center growing and how much power is left.
The RTS Dubai data centre will be located in the new DGCX co-location facility, which opened in February with the exchange's successful migration to its new low latency trading platform.
The RTS Dubai data center will be located in the new DGCX co-location facility, which opened in February with the exchange's successful migration to its new low latency trading platform.
The setup of MarketPrizm's co-location facility at SGX follows the roll-out of similar direct market access solutions at the Tokyo Stock Exchange last month.