A data center is a secure building that hosts servers and network equipment under controlled conditions: redundant power (UPS, generators), cooling, 24/7 physical security and connectivity to multiple carriers.
In practice, a company rents space there (a rack, half-rack or a few U) to install its servers rather than keeping them on-premises: this is colocation. Data centers are graded by reliability tier (Tier I to IV) and energy efficiency (PUE).
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