Colocation (often shortened to colo) is the model where you place your own server hardware in a professional data center and pay the data center for infrastructure (power, cooling, internet, physical security). It's fundamentally different from shared hosting, VPS, or dedicated server β the server is yours, but it lives in the data center.
Colocation vs other models
Shared hosting β you rent a slice of a server alongside other clients. Cheapest.
VPS β a virtual server (multiple VPS on one physical host). Mid-priced.
Dedicated server β one physical server is entirely yours, but it belongs to the hosting provider in their data center. High-priced.
Colocation β your server, sitting in someone else's data center; you pay monthly for space and resources. Buying the server is a large upfront cost but is cheaper long term.
When does colocation make sense?
For a large business already paying $1000+/month on hosting β buying servers pays back in 2-3 years. Banks and financial companies must control their own hardware under regulatory requirements. When special hardware is needed β GPU servers (for machine learning), large storage (hundreds of terabytes), custom configurations. Compliance β healthcare, government data may require controlling your own hardware.
What's included in colocation
Rack space β slot for your server. 1U (1.75 inches) is the smallest, 42U is a full rack. Power β electricity (in kW or amperes). Standard 110V or 220V. Cooling β the data center provides it. Bandwidth β internet connection, typically in Mbps or Gbps. Cross-connect β direct link to another server or provider.
Pricing
Tier 1 data center (lowest tier) β $50-200/month for a 1U server. Tier 3 and Tier 4 (higher uptime SLA) β $300-1500/month. Bandwidth β $5-50/Mbps/month. Power β $0.10-0.50/kWh. Full rack total: small business $500-2000/month, large business $5000-20000+/month.
Sayt.uz practice
Sayt.uz tariffs don't offer colocation β it's a very niche service. We do use colocation rack space in our data center for our own company's hardware. Clients who need colocation are large banks and government agencies, who pick other Uzbek data centers (UzInfoCom, EMU Soft) or international ones (Equinix, Digital Realty). Tip: colocation is unnecessarily complex for small and mid-size businesses β VPS or dedicated server is enough. For large corporations it's a strategic CIO/IT-director decision.