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Colocation - Colocation is a form of hositng in which you are renting out real estate in a datacenter. You are purchasing the bandwidth and the rackspace to put your own servers in. This allows the you to install any hardware that may be needed, or specific software before it is shipped off to be housed within a datacenter. Many colocation users live near the data center in which their server is housed, so they can have direct access to their server. This allows for hardware changes and upgrades, along with software upgrades. Most of which can only be done if the server is physically present.
Colocation is for very large and diverse web sites or businesses that require top notch hardware and software that only they can provide. In most cases the user can find better deals and build a server to their likings much cheaper then a pre-built leased server. To find a colocation company click here. Also colocation is for young enterpenuers looking to startup their own hosting company. However if you are just starting up you might want to start with just a dedicated server before you spend the big bucks for colocation
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