Complex sentence: Colocation has become a popular option for companies with midsize IT needs--especially those in Internet related business--because it allows the company to focus its IT staff on the actual work being done, instead of the logistical support needs which underlie the work.
Split into simpler sentences: Colocation has become a popular option for companies with midsize IT needs--especially those in Internet related business. It allows companies to focus its IT staff on the actual work being done, instead of the logistical support needs which underlie the work.