Colocation Hosting is a service where a business places its own servers and network equipment in a professionally operated third party Data Centre. The customer continues to own and manage the hardware, while the Colocation Provider supplies the rack space, resilient power, cooling, connectivity, physical security and facility support needed to keep it running.
Put simply, Colocation lets you keep control of your physical IT equipment without having to operate the building and critical infrastructure around it. It can be a practical option for a business that has outgrown an office server room, needs stronger resilience, wants a known UK data location or uses hardware that a standard cloud service cannot easily replace.
Colocation is already an important part of the UK digital economy. The UK Government estimated that Great Britain had approximately 1.6 gigawatts of Colocation Data Centre capacity in 2024, measured by maximum rated IT load. UK Government Data Centre capacity estimate London represented 1,048 megawatts of that total.
In this guide, we explain what Colocation Hosting means, how it works, what it costs and how to decide whether it is suitable for your business.
What does ‘Colocation’ mean?
The simplest Colocation Hosting definition is:
Colocation is a facility service where customer-owned hardware is housed inside a third-party Data Centre that provides space, power, cooling, connectivity and physical security. The word describes multiple organisations locating their equipment within the same professionally managed facility. Each customer keeps control of its own servers, storage and network equipment, normally inside a secure rack or private cabinet.
A useful way to think about it is that your business owns what is inside the rack, while the Colocation Provider operates the environment around it. This makes a Colocation Data Centre different from an office server room. Instead of your
organisation maintaining generators, uninterruptible power supplies, cooling systems, fire protection and physical security, those facility responsibilities are handled by a specialist Data Centre Operator.
Is Colocation a type of Hosting?
Colocation is a type of infrastructure hosting, but the Provider does not normally supply the server itself.
With Cloud Hosting, you consume virtual computing resources owned by a Cloud Provider. With Dedicated Server Hosting, you rent a physical server owned by the Hosting Provider. With Server Colocation, your organisation owns the physical server and rents the environment needed to operate it.
That distinction affects who pays for the hardware, who maintains it and how easily the infrastructure can be changed.
How does Colocation Hosting work?
A Colocation deployment normally follows a straightforward process.
- Access the equipment. The business records the size, power draw, connectivity and resilience requirements of its servers and network devices.
- Choose Data Centre location. The decision may consider physical access, latency, geographic resilience, carrier availability and UK data residency.
- Select the rack space. This could be space for one server, a private section of a rack, a full 42U cabinet or several racks in a private caged environment.
- Plan power and connectivity. The Provider confirms the power allocation, A+B power feeds, bandwidth, IP addressing and any cross connects or private circuits.
- Install the equipment. The hardware is delivered, mounted in the rack and connected to power and network services.
- Test the deployment. The customer checks remote access, monitoring, backuos, connectivity and failover arrangements before completing the migration.
- Manage it remotely. Day to day administration is normally handles through tools such as IPMI, KVM over IP and the organisation’s existing monitoring systems.
- Use remote hands when needed. On site engineers can complete agreed physical tasks when the customer cannot attend the facility.
What equipment can be placed in Colocation?
Colocation can support more than standard web servers. A deployment may include:
- Physical servers and bare metal servers
- Storage arrays and backup appliances
- Network switches, routers and firewalls
- Private cloud infrastructure and hypervisors
- GPU servers and artificial intelligence workloads
- High performance computing equipment
- Specialist or custom hardware
- Disaster recovery systems
The equipment must be suitable for the available rack space, power allocation, cooling design and network environment.
What rack space do you need?
Data Centre equipment is usually measured in rack units, written as U. One rack unit is 1.75 inches high. A 1U server occupies one unit, while a 4U server occupies four.
Common Colocation options include:
| Option | What it Provides | Typical Use |
| Single Server space | Space for one 1U, 2U or 4U Server | A small deployment or first move out of an office |
| Quarter Rack | A private section of a shared cabinet | Several servers and network devices |
| Half Rack | More private rack space and power | A growing hardware estate |
| Full Rack | Exclusive use of a private 4″U cabinet | Larger or higher density infrastructure |
| Multiple racks or private cages | Several cabinets with additional separation | Enterprise and private cloud deployments |
At CWCS, options range from 1U Single Server Colocation to a private 42U Full Rack. Quarter Rack provides 9U, while Half Rack provides 20U. This gives customers a route to increase space without immediately committing to a complete cabinet.
Single Server, Quarter Rack and Half Rack options are available at Nottingham. Manchester and London provide Full Rack Colocation only.
Power is just as important as physical space. A rack can have spare U capacity but no remaining usable power. The equipment’s normal draw, peak draw and future requirements should therefore
be measured before a rack is selected.
CWCS Full Rack Colocation supports allocations up to 64 Amps, with high density configurations up to 22kW per rack available at the Nottingham data centre. Amps should not be converted into a guaranteed kW figure without knowing the voltage, phase and A+B feed configuration.
Colocation Management
What does the customer manage and what does the Provider supply?
Colocation uses a shared responsibility model. The exact boundary varies by contract, but a typical split looks like this:
| The customer normally manages | The Colocation Provider normally manages |
| Servers, storage and network equipment | Data Centre building and rack environment |
| Operating systems and hypervisors | Utility supply, UPS systems and generators |
| Applications and databases | Cooling and environmental monitoring |
| Software updates and security patching | Physical security and access control |
| Backups and disaster recovery design | Carrier access and cross connect facilities |
| Workload monitoring and data security | Facility fire detection and suppression |
| Hardware warranties and spare parts | Optional remote hands and site support |
Colocation does not automatically mean fully managed hosting. Server management, operating system support, backups and managed security services may be available, but they are separate from the underlying facility service unless the agreement says otherwise.
What are remote hands?
Remote hands is an on site support service for agreed physical tasks. It can reduce the need for a
customer to travel to the data centre for basic checks or interventions.
At CWCS, remote hands can include checking hardware status lights, power cycling equipment and connecting a KVM for remote diagnostics. It does not include repairing or replacing customer owned hardware. If a component fails, the customer remains responsible for supplying the replacement and agreeing how the work will be completed.
This boundary should be checked before signing a colocation contract. Ask which tasks are included, what requires approval, what the response time is and whether additional charges apply.
Power and Cooling
How do Colocation power and resilience work?
Servers need continuous power, cooling and network access. A professionally designed Colocation facility uses several layers of infrastructure to reduce the risk of one failure causing an interruption.
What are A+B power feeds?
A+B power means a rack receives power through two separate feeds. Equipment with dual power supplies can connect one supply to the A feed and the other to the B feed. If one path becomes unavailable, the second can continue supplying the equipment.
This design helps remove a single point of failure, but the server and power distribution must be configured correctly to benefit from it.
What happens if utility power fails?
Uninterruptible power supply systems provide immediate backup while standby generators start. Resilience descriptions such as N+1 mean the facility has at least one additional component beyond the number required for normal operation.
CWCS Colocation uses redundant A+B feeds supported by N+1 Riello UPS units and N+1 standby generators. Its financially backed service level agreement covers 100% network and power uptime.
How are servers kept cool?
Data centre cooling removes the heat created by IT equipment. Cooling design may use chilled water systems, hot aisle containment, cold aisle containment and environmental sensors that monitor temperature and humidity.
Power usage effectiveness, or PUE, compares the total energy used by a data centre with the energy delivered to its IT equipment. A figure closer to 1.0 indicates that less additional energy is being used for cooling and other supporting systems.
CWCS’s Nottingham data centre has a PUE of approximately 1.15 and uses 100% renewable, REGO backed energy. These figures apply specifically to Nottingham and should not be treated as group wide averages.
Power efficiency is becoming an increasingly important buying consideration. The House of Commons Library reports that data centres currently consume around 2.5% of UK electricity, with sector consumption expected to increase four fold by 2030. House of Commons Library Data Centre briefing.
Connectivity
How does Colocation connectivity work?
Connectivity is one of the main differences between a data centre and an office server room. A carrier neutral Data Centre gives customers access to multiple network carriers rather than restricting them to one Provider.
This can improve choice, resilience and the ability to build direct connections to other sites and services.
Common Colocation connectivity terms
Bandwidth is the amount of data a connection can carry over a given period.
IP transit provides a route from the customer’s network to the wider internet.
A cross connect is a dedicated physical connection between a customer rack and another network, carrier, customer or service within the facility.
Peering allows networks to exchange traffic directly, often through an internet exchange such as LINX.
BGP, or Border Gateway Protocol, controls how traffic is routed between autonomous networks. A multi-homed BGP network can use more than one upstream provider, helping improve resilience and route selection.
A cloud on ramp provides private or dedicated connectivity between colocated infrastructure and a public cloud platform. Examples include AWS Direct Connect, Microsoft Azure ExpressRoute and Google Cloud Dedicated Interconnect.
These connections make Colocation useful as the physical foundation of a hybrid cloud or multi-cloud environment. A business might keep steady, sensitive or specialist workloads on its own hardware while using public cloud for elastic capacity and managed platform services.
CWCS provides carrier neutral connectivity with access to more than 400 carriers, LINX membership, fibre connectivity to every rack and a redundant, multi homed BGP network. DDoS protection is included on the network, and connectivity is available up to 10Gbps, with higher enterprise options available.
What are the benefits of Colocation?
Better infrastructure than an office server room
Maintaining suitable power, cooling, fire protection and physical security in an office can be expensive and difficult. Colocation moves the equipment into an environment designed specifically for IT infrastructure.
Control of customer owned hardware
The customer selects and owns the servers, storage and network equipment. This supports custom configurations, specialist components and hardware lifecycle decisions that may not be possible with a standard cloud service.
Resilient power and connectivity
UPS systems, standby generators, redundant power paths, diverse connectivity and environmental monitoring can provide a stronger platform than a typical business premises.
Physical security
Colocation facilities can use controlled and audited access, CCTV, on site personnel, mantraps, locked cabinets and fire protection. Customers still remain responsible for operating system, application and data security.
UK data residency and location certainty
A known UK facility can help an organisation demonstrate where its physical equipment and data are located. This can support governance, customer requirements and compliance planning.
Access to networks and cloud services
Carrier choice, cross connects, peering and cloud on ramps make it possible to build connectivity that would be difficult to reproduce in a normal office.
Support for high density and specialist workloads
Colocation can accommodate GPU hosting, artificial intelligence, high performance computing and custom infrastructure when suitable power and cooling are available.
A practical route for growth
Businesses can move from individual server space to private racks and multi rack deployments. This provides physical expansion without requiring them to build and operate their own Data Centre.
What are the disadvantages of Colocation?
Colocation is not automatically the right choice for every organisation.
- The customer must purchase and own the hardware.
- Hardware maintenance and spare parts remain the customer’s responsibility.
- Adding capacity requires physical equipment and planning.
- Power hungry equipment can increase monthly costs.
- Cross connects, remote hands and additional bandwidth may carry separate charges.
- Physical access may require travel and advance booking.
- A single low-power server may be simpler or less expensive on Dedicated Hosting.
- Colocation requires internal technical skills or separately purchased managed services.
- It cannot match the immediate elastic scaling of public cloud.
A trustworthy Provider should help a prospective customer assess these limitations rather than assuming Colocation is always the best answer.
Colocation vs Cloud, Dedicated Servers, and On-Premises Infrastructure
The right infrastructure model depends on ownership, management, cost, control and workload behaviour.
| Consideration | Colocation | Public Cloud | Dedicated Server | On Premises |
| Hardware Owner | Customer | Cloud Provider | Hosting Provider | Customer |
| Facility Operator | Colocation Provider | Cloud Provider | Hosting Provider | Customer |
| Physical control | High | Low | Limited | High |
| Elastic scaling | Limited | High | Limited | Limited |
| Custom hardware | Yes | Usually no | Limited to provider options | Yes |
| Upfront hardware cost | Yes | No | No | Yes |
| Data location certainty | High when specified | Depends on service design | High when specified | High |
| Best suited to | Steady, specialist or controlled infrastructure | Variable workloads and managed service | Simpler physical hosting | Organisations able to operate their own facility |
Colocation vs Cloud Hosting
Colocation favours hardware control, custom configurations, predictable steady workloads and direct network design. Public cloud favours rapid provisioning, elastic scaling and managed platform services.
The two can work together. Hybrid IT places each workload in the environment that best meets its technical, commercial and regulatory requirements.
Ofcom estimated that the UK cloud infrastructure market was worth £7 billion to £7.5 billion in 2022. AWS and Microsoft held a combined share of 70% to 80%, while Google held 5% to 10%. Ofcom also identified egress fees, technical switching barriers and committed spend discounts as potential obstacles for UK cloud customers. Ofcom cloud services market study.
These figures do not mean that businesses should abandon cloud. They support the case for careful workload Placement, portability and hybrid cloud planning.
Colocation vs Dedicated Server Hosting
With Colocation, the customer owns the physical server. With Dedicated Hosting, the Hosting Provider owns the server and rents it to the customer.
Dedicated Hosting can be simpler for small deployment because the Provider handles the hardware lifecycle. Colocation offers more physical control and customisation, but it also leaves the customer responsible for hardware maintenance.
Colocation vs an Office Server Room
Both models allow the customer to own its equipment. The difference is responsibility for the surrounding environment.
With on-premises infratsructure, the organisation must provide suitable power, cooling, connectivity, fire protection, security, and building reilisence. Colocation transfers those facility responsibilities to a specialist Provider while leaving the customer in control of its hardware.
For a detailed migration perspective, read From On-Premise to Colocation.
Colocation vs Private Cloud
Private Cloud is a computing platform that provides virtualised and often self service infrastructure for one organisation. Colocation is the physical housing layer. A Private Cloud can therefore run on customer-owned equipment inside a Colocation facility.
Who should use Colocation Hosting?
Colocation may suit:
- Businesses that already own suitable servers
- Organisations moving out of an office server room
- Companies with steady and predicatble workloads
- Businesses usining custom hardwae or network designs
- Financial services, healthcare and other regulated organisaitons
- SaaS and ecommerce platforms
- Organisations requiring UK data residency
- Businesses building hyrid cloud or multi-cloud environments
- GPU, articifical intelligence and high performance computing deployments
- Disaster recovery and business continuity environments
- Companies requiring low latency or direct partner connectivity
It may be the wrong choice for a new business with no existing hardware, a short-term project, a highly unpredictable workload, or an organisation that wants a completely managed platform. In those situations, Cloud, or Dedicated Hosting may be more appropriate.
Security and Cost
Is Colocation Secure?
Colocation can improve physical security because the equipment is housed in a purpose built and
monitored facility. Security controls may include CCTV, locked cabinets, controlled access, visitor records, on site personnel, mantraps, environmental monitoring and fire detection and suppression.
CWCS Colocation operations hold ISO 27001 and ISO 9001 certifications and use controlled, audited access. Its Nottingham facility includes mantraps, CCTV and IG 451 clean agent fire suppression.
However, the shared responsibility model still applies. A secure building does not replace operating system patching, firewall configuration, encryption, backups, vulnerability management, security monitoring or incident response. The customer must protect its workloads and data, unless those responsibilities are explicitly included in a managed service.
Can Colocation support UK GDPR and Data Residency?
Housing equipment in a known UK Data Centre can support data residency, sovereignty and governance requirements. It can help an organisation identify where its physical infrastructure is located and who can access it.
UK data residency does not automatically equal UK GDPR compliance. The organisation must still understand whether it is acting as a data controller or processor, document any subprocessors, apply appropriate technical and organisational measures, manage international transfers and maintain suitable contracts and access controls.
The Information Commisssioner’s Ofice provides the authoritative guidance businesses should use when assessing their obligations. ICO Data Protection Guidance.
The UK Government designated Data Centres as Critical National Infrastructure in 2024, reflecting their importance to essential services, the economy and national resilience.
How much does Colocation Hosting cost?
There is no single standard colocation price because every deployment uses a different combination of space, power, connectivity and support.
- The main cost factors are:
- Rack units or cabinet size
- Power allocation and actual power consumption
- Single or redundant A+B power feeds
- Bandwidth and committed data rates
- IP addresses
- Cross connects and private circuits
- Remote hands and KVM services
- Installation and setup work
- Data centre location
- Service level commitments
- Contract term
- Future expansion requirements
When comparing quotations, ask exactly what is included. A low headline price may exclude power usage, cross connects, support, or additional bandwidth.
CWCS provides Colocation pricing by quotation because rack size, power draw, connectivity and location must be assessed together.
How to choose a Colocation Provider
A Provider should be evaluated on more than its monthly price.
Location and Access
Consider latency, travel time, site access, geographic resilience and whether the facility provides the required UK data location. If more than one site is being used, assess the distance and network diversity between them.
Power and cooling
Ask about available power per rack, high density capability, A+B feeds, UPS design, generators, cooling resilience, environmental monitoring and expansion capacity.
Connectivity
Check whether the facility is carrier neutral, which carriers are available, how cross connects are ordered, whether fibre routes are diverse and whether private cloud connectivity is supported.
Security and certifications
Review physical access, CCTV, visitor controls, locked rack options, fire protection, audit records and relevant certifications such as ISO 27001.
Support and remote hands
Confirm support hours, on site coverage, response targets, remote hands tasks, KVM access, escalation routes and the boundary between facility support and hardware maintenance.
Service levels and commercial terms
Review the network and power service level agreement, contract length, setup charges, power billing, bandwidth costs, remote hands fees and the process for adding more equipment.
Future capacity
Growth should be considered at the start. The House of Commons Library reports that UK Data Centre capacity could rise to between 3.3GW and 6.3GW by 2030, depending on policy and investment, but that supply may still struggle to meet demand. Available power and expansion space are therefore material buying considerations.
For more detail, read ‘What to look for in a Data Centre Provider.’
CWCS Colocation in Numbers
- Three UK Data Centre locations in Nottingham, Manchester and London
- Colocation options from 1U to a private 42U rack
- Full Rack power allocations up to 64 Amps
- High density configurations up to 22kW per rack at Nottingham
- Connectivity up to 10Gbps, with higher enterprise options available
- Access to more than 400 carriers
- Approximately 1.15 PUE at Nottingham
- 100% renewable, REGO backed energy at Nottingham
- Redundant A+B power feeds
- N+1 UPS, generator and cooling resilience
- 24 hour UK based support, every day of the year
- Financially backed 100% network and power uptime service level agreement
- More than 25 years of UK hosting experience
Explore UK Server Colocation or compare CWCS locations in Nottingham, Manchester and London.
What is Colocation Hosting, FAQs
What does Colocation Hosting mean?
Colocation Hosting means placing customer owned servers and network equipment inside a third party Data Centre. The customer manages the hardware and software, while the provider supplies rack space, resilient power, cooling, connectivity and physical security.
Do I still own my servers with Colocation?
Yes. Hardware ownership is one of the main distinctions between Colocation and Dedicated Hosting. The customer owns the servers, storage and network equipment and remains responsible for their maintenance.
Is Colocation the same as Cloud Hosting?
No. Cloud Hosting gives customers access to virtual computing resources owned by a Cloud Provider. Colocation houses physical equipment owned by the customer. The two can be connected as part of a hybrid cloud environment.
What does a Colocation Provider manage?
A Colocation Provider normally manages the data centre building, racks, power infrastructure, cooling, environmental monitoring, physical security and access to network carriers. Managed server services may be available separately.
Can I access my equipment in the Data Centre?
Normally, yes, although access must follow the facility’s security procedures. This may require identification, approval, advance booking and an escort. Remote hands can often complete simple physical tasks when a visit is unnecessary.
What happens if my hardware fails?
The customer normally remains responsible for hardware warranties, spare parts, repairs and replacements. The Provider may help with diagnosis or agreed physical tasks, but the exact remote hands boundary should be confirmed in the contract.
Is Colocation cheaper than cloud?
It depends on the workload, hardware, power use, connectivity and management requirements. Colocation may provide predictable economics for steady workloads and existing equipment, while cloud may be more suitable for variable demand and managed platform services.
How much Colocation rack space do I need?
Calculate the number and size of the devices, their total power draw, network equipment, cabling space and expected growth. Rack space and power should be planned together because either can become the limiting factor.
Does Colocation help with UK GDPR?
A UK Colocation facility can support data residency and governance requirements, but it does not automatically make an organisation UK GDPR compliant. Contracts, data flows, security controls and controller or processor responsibilities must still be assessed.
Is Colocation right for your business?
Colocation can be a strong fit when a business wants to retain ownership of its hardware but no longer wants to operate the power, cooling, connectivity and physical security around it. It can support predictable workloads, specialist equipment, UK data residency, disaster recovery and hybrid cloud infrastructure.
It is not the best option for every organisation. Businesses that want instant scaling, no hardware ownership or a fully managed platform may be better served by Cloud or Dedicated Hosting. The decision should start with your equipment, power, connectivity, location, security and support requirements.
Talk to a CWCS Colocation Specialist to discuss your infrastructure and identify the appropriate rack space, power allocation, connectivity and UK Data Centre location.
Request a Colocation quote or arrange a tour of a CWCS Data Centre.
