Cloud vs Colocation: Which is better for your business?

With many businesses under pressure to drive digital transformation, IT leaders are looking to implement cloud and data center colocation solutions to increase the efficiency of their current infrastructure whilst also delivering a high level of service. Looking at the offerings of cloud vs colocation, they are not mutually exclusive options, with many businesses using both in a hybrid solution that best suits their needs. A mix of colocation and cloud can be very beneficial for balancing requirements including security, flexible compute resource levels, and legacy applications.

What is a Cloud service?

A cloud service is a provider that stores and maintains servers in digital infrastructure. Business leaders transport the information from their physical servers and upload them to one virtual place. They typically pay a monthly fee for a subscription, which grants them a designated amount of storage for their company’s data. On the organization’s behalf, the server handles software installation and program performance of the servers online.

What is a Colocation service?

Many people believe that colocation is simply a data center where you can rent space, obtain electricity, and connect to the Internet. Colocation, on the other hand, is about more than just data center space.

Today’s colocation data centers provide a variety of services, ranging from managed IT to hybrid cloud. They can also give you more power density, which is important for scaling and supporting new technologies quickly. Some data center colocation providers also provide direct access to popular public cloud platforms like Google Cloud Platform, Amazon Web Services (AWS), and Microsoft Azure.

Cloud vs Colocation: The Differences

The best way to understand whether your business needs colocation or cloud is to consider what each of these services has to offer you. Knowing the pros and cons of colocation vs cloud will decide to choose one over the other, or maybe some combination of both, a lot easier for you.

Cloud and colocation have four major points of difference, and they are:

Security

Both cloud storage and colocation data centers offer greater security when compared to on-premises solutions. Although executives often cite security concerns as one of the primary reasons holding them back from hosted services. The fact is that cloud computing is more secure than on-premises infrastructure.

Entrusting your company data to a third party may seem like a poor security move. However, dedicated managed service providers are better equipped to handle security issues. Service providers have resources and talent explicitly allocated to cybersecurity concerns, which means they can identify threats quicker and mitigate risks more comprehensively than in-house IT specialists.

When it comes to cloud infrastructure, the data security benefits are only as good as the service provider’s reputation. Reputable cloud hosting vendors have robust, multi-layered security frameworks in place and are willing to demonstrate their resilience.

A colocation strategy can be even better from a security perspective. But only if you have the knowledge, expertise, and resources necessary to implement a competitive security solution in-house.

Ideally, a colocation facility can take care of the security framework’s physical and infrastructural elements while your team operates a remote security operations center to cover the rest.

Cloud vs Colocation: Cost 

For any business to choose between cloud and colocation, the cost has to be one of the main considerations. The average price, in terms of cloud services, for 128 GB RAM and 2×10 core setup, goes upwards of twenty thousand dollars annually. This varies according to factors like managed costs, infrastructure, hourly rates, and upfront costs.

In terms of colocation, you will have to purchase your server hardware in case you do not have it already. The average price of colocation services, all things considered, is a lot cheaper than the cloud, and it will be somewhere around USD 3,000.

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Backup and Disaster Recovery

Choosing colocation or cloud backup and disaster recovery is a definite value contributor that only comprehensive managed service providers offer. Creating, deploying, and maintaining redundant business continuity solutions are one of the most important things that any business or institution can do.

Colocation and cloud computing providers offer significant cost savings for backup and disaster recovery as built-in services. Businesses and end-users have come to expect disaster recovery solutions as standard features.

However, not all disaster recovery solutions enjoy the same degree of quality and resilience. Data centers that offer business continuity solutions also need to invest in top-of-the-line infrastructure to make those solutions usable.

If your business has to put its disaster recovery plan to the test, you want to know that you have enough bandwidth to potentially run your entire business off of a backup system indefinitely.

Cloud vs Colocation: Compliance

Entrusting an external facility with your company data may make it more challenging to comply with federal regulations. Some information may have to adhere to governmental policies to ensure it remains confidential. For example, at a healthcare facility, professionals store patient medical records in secure databases to prevent access from outsiders. Since you’re using software applications you already own, it’s your responsibility to practice compliance with your data before entering an agreement with the colocation service.

Cloud services, on the other hand, can make compliance easier. The service may already reflect current federal standards, and it may update as the policies change with time. When you store your servers on the cloud, you can be confident that your storage adheres to the government’s requirements. Therefore, what may be a limitation when choosing a colocation service can be an advantage when exercising cloud services.

Which One is Right for Your Business?

While it might seem like the choice between colocation vs cloud may be an either/or decision for companies, that isn’t always the case. These two types of hosting solutions are not mutually exclusive. A large portion of companies who have opted for off-premise IT solutions utilize a combination of both colocation and cloud services. The decision depends on the company’s specific objectives, stakeholder needs, and IT budget.