Colocation (also called “housing”) means hosting your own servers in a third party's data center, which provides space, power, cooling, security and connectivity. You keep ownership of the hardware.
It's the opposite of a dedicated server (where you rent the machine) and of cloud (where you rent capacity on demand). “Housing” and “colocation” are strict synonyms. Price depends on space (U or rack), subscribed power (kVA), IP transit and cross-connects.
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