Colocation
Model where an operator leases space, power and cooling to multiple clients within a single data center.
Colocation is a hosting model in which an operator provides several clients with physical space, power, cooling and connectivity within a single data center, each client installing and managing its own servers. This model differs from hyperscale, where the operator runs its own workloads, and from edge, which brings compute closer to the user. Colocation raises particular shared-liability questions for insurance: an infrastructure failure attributable to the operator can engage its liability toward multiple tenants, creating a contractual accumulation risk, while data or service loss often falls under each client's own cover. The allocation of cover between the site operator and its tenants is a central point of attention for the underwriter of infrastructure and cyber risks.
Hypothetical case: a cooling failure in a colocation center can damage the equipment of dozens of distinct tenants, raising the question of the operator's liability toward each.
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