As the two have some overlap, it can be confusing to understand the difference between colocation and data centres. To put it simply, colocation is a service that provides the professional storage of IT equipment such as servers, networking equipment, storage devices and backup recovery systems at data centres. Colocation is generally offered to businesses who choose not to build their own data centres. Data centres, on the other hand, are the facilities in which data and equipment are stored. Some businesses choose to build their own data centres, in which case they do not require colocation services as they manage their own IT equipment in-house.