Colocation hosting is an unconventional hosting service offered by some web hosts that allows a client to install his own server at the data center of the web host.  Unlike dedicated hosting plans, the server is not leased from the web host but is actually owned by the client. All the web host provides to the client is the use of its high speed internet bandwidth backbone and power facilities. The client is usually responsible for the installation and maintenance of the server, although some web host providers offer maintenance at an additional cost.

Consequently, colocation hosting is generally only utilized by the biggest businesses, which require the flexibility, and who employ highly technical people skilled in the maintenance and operations of servers. Compared to dedicated hosting, a colocation hosting plan is generally cheaper and a much more flexible option, although it does require a more substantial upfront cost.

Very few web hosts offer colocation hosting and it’s generally difficult to find a local web host that does offer such a hosting package outside of major cities.