Storing servers at a colocation provider is more cost-efficient than users storing them on the customer’s premises. A customer is able to install their own servers and equipment in a rack offered by the data center. The data center then provides an IP, bandwidth, and power to the server.
There are many advantages clients have with storing servers with a colocation provider, such as a low bandwidth cost, better outage protection, and additional security. Also, the server machinery and software is owned by the clients so there is no need to wait for a provider to upgrade or install software.
A colocation provider may even provide a service where they will manage and maintain the server for the client at an extra cost. This is especially useful if a user does not have IT team members or their office is located far from the colocation provider.