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What is changing in colocation?
Traditional colocation lets an organization house its own servers and other equipment in a third-party data center, using the facility’s space, power, cooling and physical protections. The offer is increasingly broader: some providers also supply interconnection options and managed or supporting services, so a site can function as one connected part of an organization’s IT architecture rather than as an isolated place to rent a rack.
That shift is visible in providers’ own descriptions. Equinix’s 2025 Form 10-K presents its customer offering as colocation, interconnection and managed IT services. CoreSite’s July 2026 report release describes colocation as an orchestration point across distributed enterprise environments. These examples show how providers frame their offers; they do not establish that every operator supplies the same services or that every service is available at every facility.
Why workload placement matters more than a simple cloud-versus-colo choice
Hybrid IT means using more than one environment—such as public cloud, colocation and on-premises systems—rather than treating infrastructure as an all-or-nothing migration. The practical question is which workloads belong where, and how well those environments work together.
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CoreSite’s 2026 report summary says enterprises are optimizing placement across cloud, colocation and on-premises systems. It reports that uptime, security and performance had overtaken cost as leading placement drivers in its survey, particularly for AI and high-density computing. These are CoreSite-reported survey results, not a universal ranking of priorities across all organizations.
Colocation may suit a workload when it needs dedicated equipment, particular network connections, control over infrastructure, or facility capacity that is difficult to obtain elsewhere. Another environment may be a better fit when its services, operating model or economics align more closely with the workload. Compare the same workload and operating assumptions; colocation is not automatically cheaper than cloud or on-premises operation.
What customers may gain from a connected facility
More ways to connect
Interconnection can link equipment in a facility to cloud providers, carriers, networks, service providers or other customers. Those links may help keep systems connected across environments, but the available partners, provisioning process, geography and charges depend on the provider and site.
In a CoreSite-reported 2025 survey, 98% of respondents said they were implementing or planning a blend of public and private cloud, on-premises and colocation services. Yet only 19% said their colocation provider offered interconnection to a variety of cloud providers. The figures point to a gap between hybrid plans and one reported capability; they do not measure the full range of provider offerings across the market.
CoreSite’s 2026 report summary says nearly eight in 10 respondents rated native, direct connectivity to major cloud providers as very important when evaluating colocation providers. S&P Global 451 Research’s 2026 trends preview also reports that organizations leasing colocation cite interconnection as a reason for doing so. Neither finding means that a particular facility has the connection a customer needs: confirm the specific cloud, carrier or network, route, provisioning method and recurring charges.
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Support beyond the facility
Some providers offer services intended to help customers operate infrastructure without keeping all support staff on site. Equinix’s 2025 Form 10-K, for example, describes customer Green Power Reports that cover electricity consumption, renewable-energy coverage and carbon footprint related to customer deployments, along with a self-service download tool introduced in 2025. This is an example of one company’s offering, not a standard feature of colocation contracts. Ask what support is included, what costs extra and what the energy report actually covers.
How AI workloads raise the stakes for power, cooling and connectivity
AI and other high-density computing can put greater demands on facility power and heat removal, while some workloads also depend on fast connections between data, computing resources and users. This makes a provider’s available capacity and cooling design important selection questions, not capabilities to assume from a general claim of “AI readiness.”
CoreSite’s 2026 report summary says nearly 70% of CIOs favored colocation and hybrid environments for certain AI/ML production workloads, including chatbots, virtual assistants and web hosting. The figure comes from CoreSite’s report summary; the underlying report was not reviewed here. It describes respondents’ preferences for specified workloads, not proof that colocation is the best choice for every AI project.
S&P Global 451 Research’s 2026 preview, based on its 2025 survey, says 21% of surveyed enterprise decision-makers planned to shift to liquid cooling over the next year, compared with 13% in its 2024 survey; another 25% planned a switch in two to four years. These are reported plans, not observed adoption, and the question concerns respondents’ primary data centers generally. They should not be read as a forecast of liquid-cooling availability at any particular colo site.
For a high-density workload, ask the facility to confirm usable power capacity per rack or suite, density limits, cooling options, expansion lead times and what happens if requirements change. For a distributed workload, establish how the site will connect to the other environments involved. A provider’s general portfolio claim is not a substitute for site-specific, contract-backed answers.
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How to compare colocation providers and sites
Compare facilities against the needs of the workload, not just against one another’s marketing descriptions. Request site-specific documentation and contract terms for each item that affects the decision.
| Decision area | What to verify |
|---|---|
| Location and latency | Proximity to users, workloads, cloud regions and network partners; expected network routes and latency for the applications involved. |
| Interconnection | Direct access to the specific cloud providers, carriers and networks required; partner choice; provisioning method and timing; recurring connection charges. |
| Power and cooling | Available capacity per rack or suite, density limits, cooling options, expansion capacity and lead time for additional power. |
| Security, compliance and control | Physical controls, relevant certifications, the customer’s responsibilities, and any workload or data-location constraints. |
| Resilience and service | Documented redundancy, maintenance practices, support coverage, incident processes and the service levels stated in the contract. |
| Cost and contract | Space, power, connectivity, installation and support charges; price escalators; contract term; and exit or migration costs. Compare total costs using the same workload and operating assumptions. |
| Energy transparency | Reporting scope, renewable-energy accounting and whether figures apply to the facility as a whole or can be attributed to the customer’s deployment. |
Ask providers to distinguish what is included in the quoted service from optional or separately billed services. A comparison is only useful if it accounts for the full contract structure and the operational work the customer still has to perform.
Read performance claims in context
Provider-level statistics can describe past performance without guaranteeing the outcome for a specific customer. Equinix reported more than 99.9999% operational uptime across its global data centers during 2025 in its Form 10-K. That is a company-reported historical portfolio figure, not a service guarantee for an individual facility, customer deployment or contract. For a buying decision, review the relevant site’s documented design and the service levels, exclusions and remedies in the proposed agreement.
Likewise, a claimed benefit is conditional. The sources cited here do not establish a neutral, cross-provider measure of customer savings or prove that colocation is inherently less expensive, greener, more secure or more reliable than every alternative. Those outcomes depend on the facility, workload, operating arrangements and contract.
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