High-Density Colocation: Definition, Benefits, Use Cases

By
Marko Aleksic
Published:
March 19, 2025

Intensive AI/ML, HPC, and real-time data analytics workloads require infrastructure that supports high power densities. Modern high-density colocation facilities achieve optimal performance by offering specialized cooling, power delivery, and infrastructure layout.

This article overviews high-density colocation and its technical features. It also covers the essential benefits, challenges, and practical applications.

High-density colocation: definition, benefits, use cases.

What Is High-Density Colocation?

High-density colocation is a data center deployment model that supports IT workloads with high power and cooling requirements. Unlike standard colocation, which provides between 5kW and 8kW per server rack, high-density colocation offers higher power densities, often exceeding 20kW.

The servers in high-density colocation centers manage the thermal output of high-wattage hardware through advanced cooling mechanisms and reinforced power distribution.

Features of High-Density Colocation

Most of the high-density colocation facilities prioritize the following features:

  • Increased power delivery.
  • Advanced thermal management.
  • Specialized infrastructure.
  • Comprehensive monitoring tools.

Read the sections below for more details about each feature.

Increased Power Delivery

Most high-density data centers offer more than 20kW per rack, with some exceeding 50kW for specific use cases (e.g., supercomputing clusters). The power is managed using high-capacity Power Distribution Units (PDUs), varying from basic rack strips to advanced floor units with power filtering, load balancing, and remote monitoring.

The advanced monitoring capabilities of PDUs often include branch circuit monitoring, a process that reports on branch circuits' electrical capacity and power usage. Therefore, the process enables centralized tracking of power usage effectiveness.

Advanced Thermal Management

Advanced cooling strategies help manage the heat generated by demanding workloads. Enterprise setups have Thermal Design Power (TDP) between 100W and 250W of generated heat, with spikes in heat generation that exceed 500W per CPU.

Accordingly, to address the heat management challenges, high-density colocation centers have the following features:

  • Liquid cooling solutions (direct-to-chip and rear-door heat exchangers) remove heat loads exceeding 500W per CPU.
  • Precision Air Conditioning (PAC) units with closed-loop control maintain ambient temperatures within one degree Celsius.
  • Computational Fluid Dynamics (CFD) analysis optimizes airflow and prevents thermal stratification.

Specialized Infrastructure

Beyond power and cooling, high-density colocation facilities require specialized structural and connectivity features, including:

  • More than 1500kg per square meter of reinforced floor loading capacity to accommodate dense rack configurations.
  • Fiber optic cabling with OM4 or OS2 specifications to support high-speed interconnects.
  • Advanced fire suppression systems, such as inert gas systems, to minimize damage to sensitive equipment.

Comprehensive Monitoring Tools

High-density colocation facilities require real-time power consumption, temperature, and humidity monitoring, with data logging at one-second intervals. A Building Management System (BMS) integration allows for the centralized control and automation of monitoring processes.

Monitoring is typically performed using Data Center Infrastructure Management (DCIM) software. DCIM allows users to plan capacity, analyze performance, and optimize their resources in the center.

An illustration showing rows of server cabinets.

Benefits of High-Density Colocation

The following list explains how high-density colocation benefits businesses with high-performance requirements:

  • Maximized computational output. GPU and ASIC deployment with TDPs that exceed 250W.
  • Reduced thermal throttling. Precise cooling maintains processor frequencies at optimal levels.
  • Lower latency. High-bandwidth network interconnects with fiber optic cabling enable rapid data transfer.
  • Improved Power Usage Effectiveness (PUE). Efficient cooling and power distribution often achieve a PUE ratio of 1.3 or less.
  • Reduced capital expenditure. Colocation offers a shared infrastructure that satisfies all the business needs but costs less than owning a facility.
  • Scalability. Modular design allows for incremental and rapid changes in power and cooling capacity.
An illustration showing rows of servers in racks.

Challenges of High-Density Colocation

While high-density colocation is advantageous for many reasons, it also presents the following challenges:

  • Electricity consumption is higher.
  • Cooling systems are expensive and require additional maintenance.
  • Complex infrastructure needs a skilled workforce.
  • Liquid cooling systems introduce additional points of failure.
  • Predicting future requirements is difficult due to evolving hardware needs and the increased popularity of software-defined infrastructure.

Note: Although specialized cooling systems require higher upfront investment and maintenance, they provide long-term savings in energy consumption, especially in very dense deployments.

High-Density Colocation Use Cases

High-density colocation best suits industries that require a lot of computational power. The table below introduces the most popular use cases:

Use CaseDescriptionExample
AI/ML model trainingAI training infrastructure needs GPU clusters with power densities exceeding 20kW per rack.Large Language Models require considerable GPU power, which is only feasible in high-density colocation.
HPC simulationsRunning complex simulations requires thousands of CPU cores and high-speed interconnects.Research institutions and universities running climate modeling or drug discovery simulations rely on HPC clusters.
Big data analyticsProcessing and analyzing large datasets.Financial institutions or e-commerce companies.
Real-time financial tradingDeploying low-latency trading platforms with high-frequency data processing.Trading firms that have servers located very close to the stock exchange.
Media rendering and transcodingProcessing of high-resolution video and audio content.Media companies and video streaming services use high-density colocation to house rendering and transcoding infrastructure.
Large-scale database operationsCompanies running in-memory database systems.Large enterprise resource planning operations.
Edge computing deploymentsLocalized AI and data processing require high power in limited space.Telecommunications companies deploying edge computing infrastructure for 5G applications.
Financial servicesLow-latency trading and risk analysis applications require extremely powerful servers.Banks doing risk analyses on their loan portfolios.
Gaming industryHigh performance and low latency are needed for a smooth gaming experience.Online gaming servers.

Note: phoenixNAP offers secure, redundant, high-density colocation from 1/4 cabinets to private cages, with flexible hardware leasing and dedicated server options for easy scaling.

Conclusion

After reading this article, you should be better acquainted with high-density colocation. The article explained the concept and its features, presented advantages and disadvantages, and listed the most popular use cases.

Next, learn about hybrid colocation and how cloud service integration enhances scaling capabilities and improves disaster recovery.

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