Colocation hosting provides you (and your business) the bandwidth of a large business with a cost only slightly greater than that of a standard, basic web hosting package. With colocation hosting, you buy your own server and lug it down to the actual data center's office, and install it in its"rack" of servers.
Rather than sharing a company's server(s), or even renting a dedicated server from the same data center, with colocation hosting, you actually own the hardware, while still enjoying the many resources of a large, established data center. Such benefits include: controlled air temperature and humidity, building security (from fire, flood, theft, etc.), redundancy, backup systems, and the support of the company's IT and management team on hand. But you alone are responsible for the maintenance and upkeep of your server; the colocation hosting provider only handles things like connectivity, environmental factors, uninterruptible power, and security.
To many programmers, though, this is ideal, allowing the flexibility to determine what software and what hardware you will be using, with the peace of mind of knowing certain crucial (and expensive) elements of web hosting are still being taken care of for you
Colocation is really all about control: you control the extra services you can offer your clients that a regular hosting package (even with a dedicated server) might not allow, such as a VPN, colocated server space, or a dedicated server; you control what components are added/subtracted and when; you control how much bandwidth (within a certain range) each of your servers gets, rather than a fixed percentage of your overall bandwidth allotment; you control your own router, firewall, and VLAN.
A colocation hosting provider, as with other web hosting providers, can either be a standalone outfit (in this case, a data center), a third-party company that rents server space from a data center, or a colocation web hosting reseller.
The cost of a colocation hosting package is usually determined first by the amount of rack space your server or servers take up. Rack space is measured based on a rack unit (1U) of 1.75 inches in height. If you use a tower server, it will cost even more to colocate it. It may be worth your while to invest in servers that conform to measurement in rack units.
Besides rack space, you will also pay for bandwidth and for any extra services your colocation hosting provider may offer. Another cost you will need to incur with colocation hosting is insurance for your hardware, or "server insurance".
Once you've purchased your server and ready to deliver it or are having it delivered to the collocation hosting provider's site, take every precaution you can to protect your equipment, because that is the crux here - it is your equipment. Chances are you'll probably even go ahead and preconfigure your server before sending it off, which is only greater incentive for taking care. You'll probably get the most peace of mind bringing the server to the site yourself, but if for any reason you can't, be sure to pack it as securely as you possibly can, and to take out insurance on it from your postal carrier.
You will also want to choose a collocation hosting facility that is geographical proximal to either you (for fast and easy maintenance) or your target demographic (for optimal connection speeds). Ideally, you'd like both.
