Co-location web hosting is the next step up from dedicated web hosting. It's similar in that you have your own dedicated web server, but you actually own the server yourself and rent space to place it in a data center. You provide the server hardware, and the data center supplies the electricity, cooling system and physical security. The web hosting package also contains a high-speed Internet link and a dedicated IP address.
Katie Nielsen of TopTenReviews.com identifies co-location web hosting as an option for businesses or individuals who want to have complete control over their web environment and can afford their own hardware. It's worth considering if you need an unusual web configuration or a high level of security. As you own the web server yourself, you're responsible for all its maintenance and upgrades. Managed co-location hosting, in which a team from the data center manages the server, is ideal for businesses that don't have an IT department to run the server. Co-location, however, is significantly more expensive than dedicated web hosting, where you own neither the server nor house it.