Many large corporations have the Internet infrastructure to host their own web servers and have a team of IT professionals to manage and design the site, individuals and small companies do not. There is a wide range of options available from simple hosting up to running your own web servers off of a dedicated internet connection. One such option is colocation.
Colocation is often used in the data sourcing industry to mean off-site data storage, usually in a data center. This is very important for businesses since the loss of data can be crucial for companies of any size.
Colocation allows companies to place servers in arack and share receives bandwidth. Some of the advantages of colocation are the cost for bandwidth and higher outage protection.