A co-location facility, collocation center, co-lo, or carrier hotel is a type of data center where multiple customers will locate network, server and storage gear. It allows users to interconnect to a variety of telecommunications, and other network service provider(s) with a minimum of cost and complexity.

Increasingly, organizations are recognizing the benefits of co-locating their mission-critical equipment within a data center. Co-location hosting is popular because of the time and cost savings a company can incur as a result of using shared co-location data center equipment. Significant benefits of scale (large power and mechanical systems) result in large co-location facilities, typically 50,000 to 100,000 square feet. With IT and communications facilities in safe, secure hands, telecommunications, internet, ASP and content providers, as well as enterprises, can enjoy less stress and the freedom to focus on their core business. Additionally, customers reduce their traffic back-haul costs and free up their internal networks for other uses. However, by outsourcing network traffic to a co-location service provider with greater bandwidth capacity, website access speeds should improve considerably.

Major types of co-location hosting customers are:

  • Web commerce companies, who use the local collocation facilities for a safe environment and cost-effective, redundant connections to the Internet
  • Major enterprises, who use the co-lo facility for disaster avoidance, offsite data backup and business continuity
  • Telecommunication companies, who use the facilities to interexchange traffic with other telecommunications companies and access to potential clients

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