Colocation hosting is much like renting a house for your server. The hosting service provider provides you with a storage space, electricity, internet connection, cooling, and security for your machine or other hardware. Colocation hosting is often overlooked as it is more expensive and requires more maintenance than other hosting types.
You have a web server for your business
Using colocation hosting services will actually help your business save money. If you have some web servers for your business, there will be some costs that you won't be able to avoid. These costs include allocating a space for an in-house data center, upgrading your internet connection to a T1 line or even optical fiber, install air conditioning and security systems for your data center, and also upgrading your electrical circuits to accommodate the increased power usage.
All these things will cost thousands of dollars, which could be better spent for your business. So, even though colocation hosting will seem expensive, but it will definitely be more cost effective for businesses overall.