Colocation is rented space, power, and cooling in someone else's data center for hardware you own: cabinets and cages, cross connects to carriers and cloud on ramps inside the building, and remote hands. It is bought for steady workloads where a fixed monthly rate beats the cloud bill, for latency or sovereignty reasons, and by businesses leaving a server room.
How businesses buy it
Our ranked guide to colocation providers sets out three paths. An interconnection led provider when the point is being where carriers and cloud on ramps meet. A scale and density led provider when power per rack, resilience, or AI class hardware drives the requirement. A proximity and services led provider when the data center should be near your people, with managed help. Our guide to enterprise colocation services sets out what a cabinet, cage, or suite includes and starts the purchase with an audit of measured power draw, not a tour; the Equinix vs Digital Realty and Flexential vs TierPoint verdicts compare the flagship and mid market pairs. If the requirement is measured in hundreds of kilowatts or more, our guide to wholesale vs retail colocation sets out where the line between a large cage and a wholesale suite falls, and how the two are priced and leased.
How to shortlist providers
- Footprint: metros that pass your real proximity test; secondary markets still hold capacity while flagship hubs carry premiums and waitlists.
- Pricing transparency: the kilowatts in the quote, how power is metered or committed, and the fee schedule for cross connects and remote hands.
- Support quality: remote hands response at night, concurrently maintainable power and cooling, and the facility's worst recent day, asked of engineers.
- Contract flexibility: expansion rights at a defined rate, a cap on renewal increases, and billing that starts when connectivity exists.
What pricing looks like
The rack is what you see; the kilowatt is what you buy. Our pricing guide puts retail colocation in major North American markets at roughly $120 to $250 per kilowatt per month, a single cabinet with a typical power bundle around $700 to $2,000 a month all in, and cross connects typically $100 to $300 a month each, with vacancy at record lows and renewals arriving with increases.
A Technology Advisor compares the whole category and pulls quotes across every contender, free.