Server colocation is an attractive option for individuals and small businesses who want all the benefits of having a popular website with tons of hits, but don't necessarily want to pay for the bandwidth that such popularity requires. You still pay a fee, but it isn't for bandwidth — it's a rental charge.

A company will store all of its sensitive data — web pages and downloadables, for example — onto a server, and then physically haul the server to a different location. This location is the home operation center of the server colocation provider. Once you have your server there, the server colocation provider will take over and install your server in their rack.