Co-location most commonly refers to running or installing data into a single computer, data centre or process. For example, virtualisation happens when a host server uses virtual software and hardware platforms to run more than a single instance of a piece of software on a different platform. When it comes to website hosting, co-location involves co-locating the network equipment that keeps your website up to another location. There are a number of facilities that exist specifically for the co-location of equipment. The gear may be co-located to a brand new location, but the end result is essentially the same and does not necessarily impact your website's capabilities.

The biggest decision to make when it comes to your hosting is whether or not you should go for data centre hosting or co-location, however they are actually one and the same for the most part.

Co-location facilities are data centres, but not all data centres are co-location facilities. Some data centres may not allow for any equipment to be co-located, but may still allow for purchase of dedicated servers so that essentially the same thing can be achieved. Data centres are brick and mortar facilities; equipment is housed that allows for remote user access for web hosting and other computer related services. Co-location is the process of housing this data and information someplace else other than in these data centres owned by the hosting company in question.

Some of the benefits of co-location are listed below:

- One benefit to co-location is an increase in security, as data centres offer strong server security and confidence for your most critical data. Data centres used in co-location are monitored all the time, 24 hours a day and 7 days a week which means that your data is safe.

- Your web host benefits from co-location because they do not have to shell out the costs associated with building and maintaining their own in house dedicated servers, therefore they can sell hosting to you and co-locate your hosting equipment to a more inexpensive option.

- Co-location allows hosting clients to have their own bandwidth, ram and other important hardware without being forced to share. What this means is that systems and servers can run at their highest possible capacity.

- Because co-location involves dedicated servers that are regularly monitored and located in the highest quality facilities, hosting clients can rest assure that the services they purchase will be 100% reliable and trustworthy.

- The concept at the core of co-location is location independence, which means that you are not required to have your data or equipment hosted by a specific data centre. Instead, you have independence to host your data and equipment wherever it is most feasible for the smooth operation of your business website or data.
By co-locating your server, your physical business can run efficiently and effectively.

- Another benefit of co-location is an increase in flexibility because you will be able to grow and upgrade your technology as your company grows without ever having to make additional investments.