Colocation is the specific type of web hosting where you send in a physical server to a data center where you want it to be hosted. The data center usually provides the internet connectivity, the power and the space required to host it. Web page web hosting on the collocation business needs a rather big capital to startup as well.
Only way to go about web page hosting in the collocation industry is through renting your own rackspace in a datacenter. This doesn’t exactly come cheaply, so this industry isn’t for everybody. But, with the right planning and a foresight on good data centers, it’s not too hard to make a killing doing this. You need a vast amount of technical knowledge to set up your own networking and power gear, so any newbies are advised to stay away from this till they feel that they are actually ready to take on the collocation challenge.