In today’s modern technology space, companies are opting to migrate from on-premises hardware to hosted solutions.

Every business wants the optimal cohesion between the best technology available and a cost-effective solution. Identifying the unique hosting needs of the business is crucial.

This decision is often instigated due to overhead cost but can spiderweb out into security opportunities, redundancy, disaster recovery, and many other factors.

To cater to the multitude of business sizes, data centers offer a wide range of customizable solutions.  In this article, we are going to compare colocation to cloud computing services.

What’s the Difference Between Colocation and Cloud Computing?

Both colocation and cloud offer hosted computing solutions where data storage and processing happen in a data center that off-site from your physical business location.

What is Cloud Computing?

Under a typical cloud service model, a data center delivers computing services through the Internet directly to its customer. The customer pays based on the usage of computing resources much in the same way homeowners pay monthly bills for using water and electricity.

The cloud service provider takes total responsibility for developing, deploying, maintaining, and securing its network architecture, and usually implements some kind of shared responsibility model to keep customer data safe.

What is Colocation?

Colocation is when a business places its own server in a third-party data center and uses their infrastructure and bandwidth to process data. The key difference here is that the business retains ownership of its server software and physical hardware. It simply uses the colocation data center’s superior infrastructure to gain more bandwidth and better security.

Colocation services often include server management and maintenance agreements. These tend to be separate services that the colocation facility offers for a monthly fee. This can be valuable when businesses can’t afford to send IT specialists to and from the colocation facility on a regular basis.

Choosing Colocation Versus Cloud Services

The decision between colocation vs. cloud computing is not a mutually exclusive one.

It is entirely feasible for companies to pick different solutions for completing various tasks.

For example, an organization may host most of its daily processing systems on a public cloud server, but host its mission-critical databases on its own server. Deploying that server on-site would be expensive and insecure, so the company will look for a colocation facility that can house and maintain its most important equipment.

This means that the decision between colocation and cloud hosting services is one that executives and IT professionals have to make based on each asset within the corporate structure. Merely migrating everything to a colocation facility or a cloud service provider often means missing out on critical opportunities to implement synergistic solutions.

How to Weigh the Benefits and Drawbacks for Individual IT Assets

Off-premise IT solutions like cloud hosting and colocation offer significant savings when compared to expensive, difficult-to-maintain on-premises alternatives.

However, it takes a higher degree of clarity to determine where individual IT assets should go.

In many cases, this decision depends on the specific objectives that company stakeholders wish to obtain from particular tasks and processes.

It relies on the motive for migrating to an off-premises solution in the first place. Whether the goal is security and compliance, for better connectivity, or for superior business continuity.

1. Security

Both colocation and cloud hosting offer benefits to 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 can.

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 physical and infrastructural elements of the security framework while your team operates a remote security operations center to cover the rest.

2. Compliance

Cloud storage can make compliance much more manageable for organizations that struggle to keep up with continually evolving demands placed on them by regulators. A reputable cloud service provider can offer on-demand compliance, shifting software and hardware packages to meet regulatory requirements on the fly. Often, the end user doesn’t even notice the difference.

In highly regulated industries such as healthcare with HIPAA Compliance,  the situation may be more delicate. Organizations that operate in these fields need to establish clear service level agreements that stipulate which party is responsible for regulatory compliance and where their respective obligations begin and end.

The same is true for colocation partners.

If your business is essentially renting space in a data center and installing your server there, you have to establish responsibility for compliance concerns from the beginning.

In most situations, this means that the colocation hosting company will take responsibility for the physical and hardware-related aspects of the compliance framework in question. Your team will be responsible for the software-oriented elements of compliance. This can be important when dealing with new or recently changed regulatory frameworks like Europe’s GDPR.

3. Connectivity

One of the primary benefits to moving computing processes into a data center environment is the ability to enjoy better and more comprehensive connectivity. This is one of the areas where well-respected data centers invest heavily in providing their clients best-in-class bandwidth, connection speed, and reliability.

On-prem solutions often lack state-of-the-art network infrastructure. Even those that enjoy state-of-the-art connectivity soon find themselves behind the looming threat of obsolescence as the marching beat of technological advance moves steadily forward.

Managed cloud computing agreements typically include clauses for updating system hardware and software in response to advances in the field. Cloud service providers have economic incentives to update their network hardware and connectivity devices since their infrastructure is the service they offer customers.

Colocation is an elegant way to maximize the throughput of a well-configured server. It allows a company to use optimal bandwidth – thanks to the colocation facility’s state-of-the-art infrastructure – without having to continually deploy, implement, and maintain updates to on-premises system architecture.

Both colocation and cloud computing also provide unique benefits to businesses looking for hosting in specific geographic areas. You can minimize page load and processing times by reducing the physical distance between users and the servers they need to access.

4. 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.

But 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.

Expert Consulting for Your IT Asset Migration

IT professionals choosing between colocation vs. cloud need to carefully assess their technology environment to determine which solution represents the best value for their data and processes.

For example; an existing legacy system infrastructure can play a significant role in this decision. If you already own your servers and they can reasonably be expected to perform for several additional years, colocation can represent a crucial value compared to replacing aging hardware.

Determining the best option for migrating your IT assets requires expert consultation with experienced colocation and cloud computing specialists. Next-generation data management and network infrastructure can hugely improve cost savings for your business if implemented with the input of a qualified data center.

Find out whether colocation or cloud computing is the best option for your business. Have one of our experts assess your IT environment today.