Collocation facilities provide space, power, cooling, and physical security for the server, storage, and networking equipment of the other firms and also connect them to a variety of telecommunications and network service providers with a minimum of cost and complexity.

Typically, the customer owns the IT equipment and the facility provides power and cooling. Customers retain control over the design and usage of their equipment, but daily management of the data center and facility are overseen by the multi-tenant collocation provider.