A U is the method used for measuring the size of server rackmount cases (the actual case of the server). Rackmount cases are wider, deeper but not as tall as your standard tower cases. This is so that you can get more of them into a single area, and because this is a better way to keep them cool.
1U is 1.75" high
2U is 3.5" high
3U is 4.25" high
etc.
The more U your server case is, the more room you've got for adding those additional components such as additional power supplies, extra hard drives or another NIC.
So if you wanted to buy a more powerful server then it would typically be between 2U & 8U, and you'd have to buy enough space in the cabinet so that your server will fit in.
From there you then buy the bandwidth separately (so if you wanted 400GB bandwidth you'd pay an extra fee). Although most providers will do a package for you,
e.g. 2U of colocations pace + 400GB bandwidth for $100 per month
A standard cabinet holds 44U, a 1/2 cabinet holds 22U.
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