I'm new to the subject, so I apologize in advance if this is a basic no brainer question, but what I would like to know is that generally speaking, does Colocation provide for you in terms of hosting the actual machine? Do they just provide a spot on a rack for you to plug an existing machine into? Or do they include that as well?
With co-location you are basically renting 3 things:
With most colocation (colo) providers, you are responsible for your own hardware. This is differentiated from a dedicated server hosting provider which purchases and sometimes maintains the hardware and software in the datacenter. If you are going colo, that means you are responsible for both the hardware and the software of the machine. The network is usually managed by the colo provider, however in some situations you can actually bring your own network in.
Some colos will let you into the datacenter to install your machine, and some will have you ship the machine and they will install it. You can typically purchase hands-on time if you need someone at the datacenter to do work on your hardware.
This can differ from company to company, so just make sure you are clear before purchasing what your colocation account includes.
With colocation, you provide your own machine. You'd set it up to boot headless and with the networking configuration they supply you with. You then ship it to their datacentre, where they rack it for you and supply you with network, power and cooling.
The alternative is what's known as a dedicated server, where they provide you with a server, with an operating system already loaded, which you effectively rent from them. The ISP is responsible for fixing hardware problems.