Server colocation means you own the server and rent space for it in a professional data centre. Here's when that makes sense, and when it doesn't.
With colocation (or "colo") you buy and own the physical server; the data centre provides the rack space, redundant power, cooling, security and high-speed connectivity it needs to run 24/7.
How colocation works
You ship or carry your server to the data centre. Staff rack it, connect power and network, and assign you IP addresses and bandwidth. You manage the software remotely; the facility manages the physical environment. It's the middle ground between running a server in your office and renting one from a provider.
What's included
- Rack space (measured in U: 1U, 2U, a full rack).
- Redundant power with UPS and generator backup.
- Cooling and fire suppression.
- Physical security and access control.
- Resilient, high-bandwidth connectivity and IP allocation.
Types of colocation
Colocation is sold in different sizes to match how much hardware you need to house:
- Single-server colocation: a 1U or 2U slot for one machine, ideal for a small business or a single application.
- Partial rack: a quarter, third or half rack for several servers and switching.
- Full rack or cage: a whole rack (typically 42U) or a private, locked cage for larger deployments.
Providers also describe colocation as retail (you rent space by the U or rack, with power and bandwidth included or metered) or wholesale (large customers lease whole rooms or megawatts of power). Most UK businesses want retail colocation, starting with a single server or partial rack and scaling up as they grow.
The benefits of colocation
Colocation combines the control of owning your own hardware with the resilience of an enterprise data centre. The main benefits are:
- Full control: you choose the exact server spec and own the hardware outright.
- Enterprise reliability, redundant power, cooling and fire suppression you couldn't justify in an office.
- Better connectivity, multiple carriers, peering and far higher bandwidth than a business line.
- Predictable cost, no monthly premium to rent the metal, so it's often cheaper long-term than a dedicated server.
- Security and compliance, physical access control, CCTV and audited facilities that help meet data-protection requirements.
Colocation vs cloud vs dedicated
Cloud is rented, instantly scalable and you never touch hardware. A dedicated server is a whole machine you rent. Colocation is for when you already own hardware (or want a specific spec), need full control, and want predictable costs: you're not paying a monthly premium to rent the metal.
| Colocation | Dedicated server | Cloud | |
|---|---|---|---|
| Who owns the hardware | You | Provider (rented) | Provider (rented) |
| Scalability | Fixed to your hardware | Fixed spec | Instant, elastic |
| Control | Full | High | Abstracted |
| Cost model | Lower recurring + upfront hardware; predictable | Monthly premium to rent the machine | Pay-as-you-go |
When colocation makes sense
It suits businesses with existing servers, specific compliance or performance needs, or steady long-term workloads where owning hardware is cheaper than renting over time. Our UK server colocation keeps your kit in a Tier-III UK data centre with resilient power and 10Gbps connectivity.
How to choose a colocation provider
Not all colocation is equal. When comparing providers, weigh up:
- Location and latency: a UK data centre keeps latency low for UK users and keeps your data in the UK. Where your server lives matters.
- Power resilience, look for N+1 or 2N redundancy, UPS and generator backup, and a Tier III (or better) facility.
- Connectivity, multiple upstream carriers and peering at exchanges like and for fast, resilient routing.
- Remote hands, on-site engineers who can reboot, swap drives or check cabling when you can't be there.
- Network and uptime , clear commitments in writing, plus protection on the network.
Gander Web's UK server colocation covers all of these, and our network page sets out our connectivity and peering in detail.
What does colocation cost?
Pricing is based on rack space (per U or per rack), power draw (amps), and bandwidth. Because you supply the hardware, the recurring cost is lower than a comparable dedicated server: the trade-off is the upfront hardware investment.
At Gander Web, single-server colocation in Newcastle starts at £49/mo, with power (from £8/mo) and bandwidth billed on top. See our colocation pricing for details.
Key takeaways
- Colocation = you own the server, the data centre houses it.
- You get power, cooling, security and connectivity; you manage the software.
- It beats cloud/dedicated when you own hardware and want control + predictable cost.
- Priced on rack space, power and bandwidth.
UK server colocation
Keep your hardware in a Tier-III UK data centre with resilient power and 10Gbps connectivity.
Explore colocationFrequently asked questions
What is colocation in simple terms?
Colocation means you own the server and rent space for it in a professional data centre. The facility supplies power, cooling, security and internet connectivity; you own the hardware and manage the software on it remotely.
Is colocation right for a small business?
Sometimes, if you already own a capable server or have specific control/compliance needs. Otherwise shared hosting or a VPS is simpler and cheaper.
Who looks after the server hardware?
You own and maintain the hardware; the data centre maintains the building, power, cooling and network. Many providers also offer remote-hands support.
Can I start with one server?
Yes. Single-server (1U/2U) colocation is common. You can scale to a full rack later.
What's the difference between colocation and a data centre?
A data centre is the building: the secure, powered, cooled facility. Colocation is the service of renting space inside that building for your own server. So colocation always happens in a data centre, but a data centre also houses cloud and dedicated hosting.
Is colocation cheaper than the cloud?
For steady, long-term workloads, usually yes. You pay an upfront cost for the hardware, but the recurring rack, power and bandwidth fees are typically lower than equivalent cloud or dedicated-server rental over a few years. The cloud wins when you need to scale up and down quickly.