A colocation data center, also called multitenant, rents space to companies that host their own hardware there, with power, cooling, security and networking provided.[1] Large ones are built by major colocation companies that lease both wholesale and retail.[1] Local companies build smaller sites that typically lease retail.[1]
The source names wholesale and retail leasing without saying where one stops and the other starts, so this page draws no line between them.
Explore in 3D
The same numbered parts as the drawing, as a model you can turn. Illustration, not to scale.
3D is not available here. The drawing above and the text below show the same parts.
How it works, part by part
- Grid connection. Brings electricity from the grid to the site.[2] In the guide: Grid connection and substation
- Switchgear and transformers. Transformers change the voltage. Switchgear, a mix of disconnect switches and circuit breakers, controls and protects the electrical equipment and can isolate parts of it.[3] In the guide: Transformers and switchgear
- Uninterruptible power supply (UPS). Provides backup power, and can run on battery banks or other technologies.[4] In the guide: Transformers and switchgear
- Backup generators. Give the site another source of power if the grid’s supply stops.[4] In the guide: Backup generators
- A tenant’s space. A tenant leases space here for its own hardware. The operator provides power, cooling, security and networking.[1] In the guide: Data halls and servers
- Another tenant’s space. Tenants can rent anything from a single cabinet to a private caged area or a full suite.[5] In the guide: Data halls and servers
- A whole hall for one tenant. Some leases cover a building’s full capacity, as at the example on this page.[6] In the guide: Data halls and servers
- Meet-me room. Where carriers end their network gear. Tenants reach them through cross-connects, physical cables between their equipment and a carrier’s.[5] More on the carrier hotel page
- Cold and hot air paths. Keep the cool air supplied to the equipment from mixing with the hot air it gives off.[4] In the guide: Cooling inside the building See it in one row of servers
- Chiller plant. Removes heat from the building’s cooling system. Air-cooled chillers do it with condensers that use outdoor air.[1] In the guide: Cooling inside the building
- Heat released outdoors. Moves the heat into the outdoor air, as dry coolers do.[1] In the guide: Heat out
- Water connection. Brings in water where the cooling design uses it on site.[1] In the guide: Water in and out
How power moves
- True of data centers generally Power usually arrives from the utility at a higher voltage. A transformer steps it down, and it passes through switchgear and backup equipment before it is shared out to the racks.[3] Parts 1, 2, 3, 4
- This type Power is one of the services the operator provides to tenants.[1] Parts 5, 6
- One example In one regulator’s order for a Washington site, backup generation is tracked tenant by tenant as well as for the whole facility.[7] CyrusOne Quincy record Part 4
How heat moves
- True of data centers generally In air-cooled halls, the aim is to keep cooling air from mixing with hot exhaust air.[4] Part 9
- This type Cooling is also one of the services the operator provides to tenants.[1] Part 10
- This type A national lab’s model does not assume colocation sites as a group use the cooling systems with the lowest PUE, though it says some do. PUE, or power usage effectiveness, is a data center’s total electricity demand divided by the electricity demand of its computing equipment.[1] A single colocation site can fall well below that range. Parts 10, 11
- True of data centers generally Air-cooled chillers are used across data centers of varying sizes.[1] Parts 10, 11
How this type differs
These differences come from how the sources define each type. None of them makes one type preferable.
- A hyperscale builder runs its own services on the site. A colocation builder leases to others.[1] Hyperscale campus
- A carrier hotel is defined by carriers interconnecting, and colocation by leasing space and services. The two can overlap.[8] Carrier hotel (telecom hotel)
- A national lab’s model places colocation between small sites and hyperscale for power-supply and airflow efficiency.[1] That is an assumption it shares with internal and communications data centers, and it is not a ranking. Enterprise and government data center
- AI is not only hyperscale: the same model puts half of accelerated AI server load in large-scale colocation.[1] AI workloads, on the hyperscale page
One real example
Polaris Forge 1 is one example of this type, chosen by hand. It is one of 5 such examples; most records on this site are not typed, including 3,110 of the 3,115 source listings on the opening map, which can overlap.
The company’s annual report says it runs data centers and colocation services, and that it signed data center leases with a tenant, CoreWeave.[6]
- The company’s filing describes a campus built in phases: a first data center, a second partly operating and a third under construction.[6]
- The company describes the first building by the computing power it can support, about 100 MW of critical IT load, meaning power available to computing equipment.[6]
- The company says leases with one tenant bring contracted capacity at the campus to 400 MW. That is a planned total, not operating capacity.[6]
- The company says its liquid cooling uses a closed-loop design. That statement covers its data centers generally, not this campus alone.[6] What “closed loop” means
Leasing a whole building is this site’s own arrangement, not what the type always means, and the filing does not use the word wholesale. CoreWeave is the tenant, not the operator, and these figures are not compared with other operators’ figures.
Questions to ask about a project of this type
- Who builds and runs the site, and who are the tenants, if any are named?
- Is capacity leased whole to one tenant or divided among several?
- Is the megawatt figure critical IT load under a lease, a utility request or a generator rating?
- Which phases are leased, which are built and which are operating?
- Who is responsible for cooling and for reporting its water use, the landlord or the tenant?
Go further on this site
All types of data center · How data centers work · The 3D map · A megawatt of what?
Sources
- 2024 United States Data Center Energy Usage Report (LBNL-2001637). Lawrence Berkeley National Laboratory. National laboratory. Cited at p. 36; Table 4.1, p. 36; p. 40; p. 41; p. 39; p. 46; Infrastructure modeling, Method Overview; pp. 42-43; p. 38. Captured 3 November 2026.
- Electricity explained: How electricity is delivered to consumers. U.S. Energy Information Administration. Government. Cited at How electricity is delivered. Captured 3 November 2026.
- Data Center Power Equipment Thermal Guidelines and Best Practices, TC 9.9 white paper. ASHRAE Technical Committee 9.9. Standards group. Cited at section 4; power distribution overview. Captured 3 November 2026.
- Best Practices Guide for Energy-Efficient Data Center Design (revised July 2024). U.S. Department of Energy, Federal Energy Management Program. Government. Cited at section 6.1.1; section 6.1; section 4. Captured 2 November 2026.
- Why Enterprises Choose Carrier Neutral Data Centers. Netrality Data Centers. Operator’s explanation. Cited at distinct zones; cross-connects. Captured 3 November 2026.
- Applied Digital Form 10-K for the fiscal year ended May 31, 2026. Applied Digital Corporation, filed with the U.S. Securities and Exchange Commission. Company document. Cited at Item 7; Item 7, Business Overview; Item 1, Polaris Forge 1; Item 1, company-wide statement. Captured 3 November 2026.
- Approval Order 26AQ-E008 and Technical Support Document, CyrusOne Quincy Data Center. Washington State Department of Ecology. Government. Cited at Approval Order, recordkeeping, p. 8. Captured 3 November 2026.
- Vulnerabilities Task Force Report, Concentration of Assets: Telecom Hotels. President's National Security Telecommunications Advisory Committee, hosted by CISA. Government. Cited at section 3.0. Captured 3 November 2026.
Sources were captured on the date shown and can change. An operator’s explanation is used only for how a part works, never for a definition or a comparison.