Colocation data centers are usually third party data centers owned by others and a client or company rents required space from them for their server or other network equipment requirement. Usually, colocation data centers are located off company premises. These data centers host the business infrastructure with building, cooling, bandwidth, and security, whereas the client company or business has to provide and manage the components like servers, firewalls, storage, etc.
Colocation data centers are highly relied on and used by the business which does not have resources required to maintain their own data center, or the organizations looking to utilize more benefits of a well-organized and established data center.
This type is also ideal for companies that can have their equipment located in multiple places. For the companies who have a large geographic coverage, can equip their servers and units via renting required racks of space from the colocation data centers available in each locality and ensure the functions at best.