Collocation hosting requires the customer to provide and manage the computing hardware.  And the service provider company (data center) will provide rack space, network bandwidth, and redundant power to support the customer.

The customer can fully customize how his servers are configured, both hardware and software, like CPU, RAM, storage (RAID system or not),  application software, anti-virus software, fire wall, database software, email server, etc.  The customer will also be responsible for hardware and software upgrade.

In contrast to dedicated hosting, the customer normally wants to choose data center close to the office, then the customer can physically access the server if required.