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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.
References in periodicals archive ?
Further to Colo Atl's strategic location in downtown Atlanta, complementing the new Southeast Route, Allied Fiber partners with long-time partner Colo Atl for its SSAE 16 certified collocation facility and ability to offer N+1 redundancy and access to multiple tier one network operators.
Tom Clements, executive director, Colorado Department of Corrections, Colorado Springs, Colo.
Colo has been a regular critic of selectmen over the past decade, especially about how the town has handled the police station renovation project.
Colo demanded he have an opportunity to respond at the meeting, calling it cowardly not to allow him to respond.
Ryan wrote to Colo in January 1995, ``My little ones are asleep now and so the house is very quiet.
Heath Construction, a leading contractor for commercial and recreational buildings in the Rocky Mountain region, has been selected by Girl Scouts -- Mile Hi Council of Denver, Colo.
E[acute accent]--Fortune Valley Hotel & Casino - Central City, Colo.
The 4H building at The Ranch, Larimer County Fairgrounds in Loveland, Colo.
Summus Works' subsidiary Steamboat TV-18 also broadcasts on Comcast's system in Steamboat Springs, Colo.
The home, designed by the Baker Hogan Houx architectural firm in Breckinridge, Colo.
The 100-acre auto park is part of the award-winning Centerra development, a 3,000-acre mixed-use, planned community, located at the foot of the Rocky Mountains in Loveland, Colo.