Co-located hosting, also often referred to colo hosting, is a hosting arrangement under which the client company provides and administers its own server hardware, while the hosting company provides essential bandwidth, rack space, power supply and other mission-critical elements. Since it requires the client to handle most of the server administration and IT support, co-located hosting works best when the hosting customer has a dedicated IT staff in-house.
Co-location has become a popular option among mid-size Web companies, because it allows them to dedicate their IT staffs to critical functions their websites and internal systems, while leaving logistical support issues to their hosting company.
Customers who choose co-location benefit from major benefits of scale, stemming from the resources of their hosting provider being leveraged across a large client base, including access to large backup power systems, excellent Internet connectivity and a large physical space to hold mission-critical server infrastructure. Co-location facilities typically offer a variety of power sources and backup generators, locked and secured rack cages or cabinets, redundant systems, physical security, as well as lower latency and higher bandwidth at a lower cost than many other hosting options.