Colocation

Colocation, usually shortened to colo, means installing servers you own in a data center you do not. You pay the facility for rack space, power, cooling, and network connectivity instead of building that yourself. The provider owns the building, the electrical plant, fire suppression, and physical security. You own the hardware inside it, including racking it, cabling it, and fixing it when it breaks.

Space is sold by the rack unit, by the cabinet, or as a locked cage, and power is billed per kW or per amp at 208 V. A cabinet price normally bundles a power allowance, with 5 kW a common baseline and anything beyond that billed as overage. One GPU node pulling 4 kW can consume most of that allowance on its own. Equinix and Digital Realty run facilities in most major metros, and nearly every provider sells remote hands by the incident when something needs a physical touch.

Colo makes sense once you own enough hardware to outgrow an office closet but not enough to justify building a facility. Check deliverable power per cabinet against your actual node draw before signing, since GPU density outruns older contracts quickly.

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Last verified August 29, 2026.