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/koh'loh-kay`sh*n/ or /koh`loh-kay'sh*n/ (Or "colocation") Providing network connections such as Internet leased lines to several servers housed together in a server room. This is typically provided as a commercial service.

The hyphenated form is correct and the most common on the web, followed by "colocation". "collocation" (/ko`loh-kay'sh*n/, not /koh'-/), is an old word with a similar meaning. It is common in dictionaries and follows the pattern of other Latin-derived words like collect, college, and collate, but is least common on the web.

The verbal form is "to colocate" or "co-locate" (commonly /koh'loh`kayt/, also (US) /koh`loh'kayt/).
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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 $100 million to a high-speed trading firm over the course of a year.
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References in periodicals archive ?
TELECOMWORLDWIRE-September 22, 2014-Wolfe Establishes point-of-presence in Los Angeles colocation centre
According to the company, the organisation signed a three-year agreement for customised Internet connectivity and colocation backup at 1Vault's Category 5 hurricane-rated data colocation centre in Fort Lauderdale.
ADTECH's existing datacentre will be connected via redundant optical fibres to Redbus Interhouse's Frankfurt colocation centre, which according to the company will facilitate dynamic load management, at the same time allowing the systems at Redbus Interhouse to serve a hot standby role.
M2 EQUITYBITES-September 22, 2014-Wolfe Establishes point-of-presence in Los Angeles colocation centre
Joaquin J Ochoa, partner and senior vice president, Aviation Technology and Engineering at subIT, said: "We are committed to advancing technology services for the trucking and aviation industries, and by collaborating with HPE to use HPE ProLiant Gen10 servers to deliver secure, high-performing and versatile infrastructures in our colocation centres, we are optimising operations for our customers while keeping their costs down." -- TradeArabia News Service
Interoute is the owner-operator of one of a Europe-based network and a global cloud services platform, which encompasses 15 datares, 17 virtual data centres and 51 colocation centres, with connections to over 195 additional third-party data centres across Europe.
Interoute is the owner-operator of a European network and a global cloud services platform, which encompasses over 70,000 km of lit fibre, 15 data centres, 17 Virtual Data Centres and 33 colocation centres, with connections to 195 additional partner Data Centres.
"Several of our WheelHouse Advanced Data Centre Solutions are being deployed in the region's growing number of cloud and colocation centres to ensure reliability, performance and scalability," he concludes.
Also, the need to post full time on-site employees is eliminated as colocation centres offers on-site hardware and software management.
The agreement enables LINX to utilise THUS' recently completed, UK-wide fibre optic network to connect its facilities at several London-based colocation centres. LINX says it requires a robust network infrastructure with substantial over-capacity so that it can re-route traffic and maintain its service in the event of operational problems at any location.