Data Center Types: The 3 Centers You Need to Know

By Tibor Moes / Updated: June 2023

Data Center Types: The 3 Centers You Need to Know (2023)<br />

Data Center Types

Picture a city teeming with life, with each home representing a computer or a device. In this digital metropolis, data centers act as the grand libraries, storing and transmitting the vast knowledge and communications that the city depends on. Welcome to our city tour, where we’ll explore different kinds of these ‘libraries’ that are critical to our digital existence.


Data centers are specialized facilities that house computer systems and related components, providing storage, processing, and distribution for large amounts of data. They are the backbone of the internet, supporting online activities and digital services.

Type 1 – Colocation Data Centers:

Akin to sharing a flat with friends, colocation data centers provide space, power, and cooling to clients who provide their own servers and storage. This is a cost-effective way for businesses to enjoy the benefits of a large data center without bearing the full cost of construction and maintenance.

Type 2 – Hyperscale Data Centers: Like a mega-factory, hyperscale data centers are designed to scale rapidly in response to increased demand. These behemoths, often owned by tech giants like Amazon and Google, are essential for cloud storage, big data processing, and other intensive tasks, mirroring the industrial revolution, but in the digital space.

Type 3 – Edge Data Centers: Imagine having a mini-library right in your neighborhood instead of a central one in the city. Edge data centers follow a similar concept. They are smaller, localized data centers that bring processing power closer to users, reducing latency and improving performance—crucial for real-time applications like autonomous driving and telemedicine.

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Data Center Types In-depth

Colocation Data Centers: Shared Spaces in the Digital World

Imagine you’re a college student, needing a place to live but unable to afford a place of your own. The solution? Roommates! By sharing the rent, utilities, and maintenance chores, everyone benefits. In the world of data centers, we find a similar concept in the form of ‘colocation data centers.’ Just like our fictional college students, businesses find it mutually beneficial to share the costs and responsibilities.

Colocation data centers can be compared to giant, high-tech apartment buildings for computer servers. Each ‘tenant’ rents space, measured in racks or cabinets, where they install their own servers, storage devices, and other hardware. The building – that is, the colocation data center – provides the vital services needed for those servers to thrive: electricity, cooling, physical security, and connections to the internet.

In the simplest terms, the colocation data center takes care of the infrastructure so the clients can focus on what’s important: their data. This gives businesses, especially smaller ones, the opportunity to leverage the advantages of high-end data centers without investing heavily in creating their own facility.

But it’s not just about saving money. Colocation data centers can also provide better connectivity. These data hubs are typically built with connections to multiple internet service providers, ensuring a smooth and reliable flow of data even if one provider encounters a problem.

Imagine a highway system with several alternative routes. If one road becomes blocked, traffic can be rerouted. In a similar way, your data, traveling through the ‘highways’ of a colocation data center, always has a clear path to its destination.

One more key advantage of colocation centers is the ability to scale. Remember our apartment analogy? If you started with just one room, but suddenly needed space for a family, it would be as simple as renting an additional room. The same goes for colocation data centers. If a business suddenly needs more space for servers, they can simply rent more racks.

In the vast digital world where data is gold, colocation data centers provide the means for even smaller businesses to stake their claim. They’re the shared apartment buildings of the data universe, enabling companies to focus on mining their data gold, rather than worrying about keeping the lights on. In our next section, we’ll move from these digital apartment buildings to the mega factories of the internet world: the hyperscale data centers. Stay tuned!

Hyperscale Data Centers: The Mega Factories of the Digital Age

Imagine standing on the edge of a sprawling factory complex. Buildings as far as the eye can see, with trucks coming and going, carrying goods to all corners of the world. Now, let’s swap those tangible goods for digital data, and you’ll have an image of what a hyperscale data center looks like. These are the mega factories of the internet, producing, storing, and distributing data on a scale that’s hard to comprehend.

Just as the industrial revolution was marked by the rise of massive manufacturing plants, the digital revolution has brought forth hyperscale data centers. These enormous facilities are designed to handle the titanic tasks of the modern digital world. They are capable of managing billions of online transactions, vast amounts of data storage, and intricate machine learning algorithms, all at the same time.

One defining characteristic of these digital behemoths is their ability to scale quickly. Picture our mega factory again. Now imagine that it can magically add new buildings whenever production ramps up. That’s the kind of rapid expansion that hyperscale data centers are capable of, adapting almost in real time to increasing demands for data processing and storage.

In terms of ownership, hyperscale data centers are generally in the hands of a few tech giants. Think of Google, Amazon, Microsoft, and Facebook. These companies require such vast amounts of computing power and storage that they build and manage their own hyperscale data centers. The benefits? Complete control over their data, better cost efficiency, and the ability to deliver lightning-fast services to their customers.

Consider Amazon, with its cloud computing service, Amazon Web Services (AWS). AWS needs to handle a staggering volume of data from countless businesses across the globe. A network of hyperscale data centers allows AWS to store and process this data efficiently and deliver the fast, reliable services that its customers expect.

But it’s not just about speed and power. As tech giants increasingly focus on sustainable practices, many hyperscale data centers are becoming leaders in green energy use. Google, for example, is committed to operating its data centers with carbon-free energy 24/7 by 2030. These giant facilities, therefore, are not only digital factories but also trailblazers in the drive towards a sustainable digital future.

In the grand scheme of the digital universe, hyperscale data centers are the vast galaxies, housing billions of pieces of data and making the interconnected web of the internet possible. In the next section, we’ll shift our focus to the smaller but equally essential elements of this universe: edge data centers. Stay tuned!

Edge Data Centers: The Local Convenience Stores of the Digital Realm

Picture a small convenience store in your neighborhood. It’s smaller than a supermarket and doesn’t have as many items, but it’s just a quick walk away and has enough essentials to meet your immediate needs. Edge data centers, in the vast digital landscape, play a similar role. They’re smaller, closer to users, and offer a rapid, efficient service that keeps the digital life humming along smoothly.

Edge data centers are like localized mini-versions of larger data centers. While they might not boast the colossal scale of a hyperscale center, or provide the communal benefits of a colocation center, they offer something equally important: proximity. By being close to users, they drastically reduce the ‘travel time’ for data, resulting in faster response times and improved performance.

Remember the last time you played a video game online or streamed a high-definition movie? The smooth, lag-free experience was likely made possible by an edge data center nearby. These facilities are critical for real-time applications, where even a slight delay can significantly impact the user experience.

Consider self-driving cars. They need to process vast amounts of data almost instantaneously to make split-second decisions. Now, imagine this data having to travel hundreds of miles to a distant data center and back. It would be like having to run to a supermarket in another town just to grab a bottle of milk! An edge data center in close proximity ensures that data doesn’t have to make this long journey, enabling real-time processing and quick decision making.

While edge data centers are critical for user experience, they also play a significant role in reducing bandwidth costs and network congestion. By processing data locally, less data needs to be sent over long-distance networks, resulting in efficient use of network resources.

Think back to our convenience store analogy. By shopping locally for everyday items, we reduce traffic and pressure on larger supermarkets. Similarly, by handling data locally, edge data centers alleviate pressure on network infrastructures, making the digital world a bit smoother for everyone.

So, while they may be smaller and less imposing than their larger counterparts, edge data centers are a critical component of the digital ecosystem. They’re the local convenience stores of our digital neighborhoods, keeping our everyday digital lives running smoothly. In the vast, interconnected world of the internet, they remind us that sometimes, local really is best.

In this article, we’ve explored the digital apartments, mega factories, and local convenience stores of the digital realm. From the communal benefits of colocation centers to the enormous power of hyperscale centers and the local efficiency of edge data centers, it’s clear that in the diverse universe of data centers, there’s a place and a purpose for all.


In our exploration of the digital universe, we’ve toured the grand apartments, mega factories, and local convenience stores of the data world, also known as colocation, hyperscale, and edge data centers. Each has its unique place and purpose, working in unison to support our ever-growing digital demands. Just as diverse cities thrive on a mix of shared spaces, large industries, and local businesses, the digital world relies on this mix of data centers to keep us connected and our data flowing smoothly. As we continue to navigate the digital age, remember the vital role these unseen powerhouses play, each a unique cog in the grand machinery of the internet.

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Frequently Asked Questions

Below are the most frequently asked questions.

What's the difference between a colocation data center and a hyperscale data center?

The primary difference lies in ownership and scale. A colocation data center is like a shared apartment for servers, where multiple businesses rent space and provide their own hardware. On the other hand, a hyperscale data center is a vast facility owned and operated by a single entity, typically a tech giant. These centers are designed to scale rapidly, handling enormous amounts of data and computation.


Why are edge data centers necessary?

Edge data centers play a crucial role in reducing latency and improving performance for end-users. By processing and storing data closer to users, they allow real-time applications like online gaming, streaming services, and autonomous driving to function smoothly. They also help reduce bandwidth costs and alleviate network congestion.


How are data centers becoming more sustainable?

As concern for the environment grows, many data centers are transitioning to renewable energy sources like wind and solar power. Tech companies with hyperscale data centers, such as Google and Microsoft, have made commitments to achieve carbon neutrality. Additionally, advancements in cooling technology and energy-efficient hardware are also helping to reduce the environmental impact of data centers.

Author: Tibor Moes

Author: Tibor Moes

Founder & Chief Editor at SoftwareLab

Tibor has tested 39 antivirus programs and 30 VPN services, and holds a Cybersecurity Graduate Certificate from Stanford University.

He uses Norton to protect his devices, CyberGhost for his privacy, and Dashlane for his passwords.

You can find him on LinkedIn or contact him here.