What Is Colocation and How Does It Compare to the Public Cloud?


Colocation is the practice of housing privately-owned servers and networking equipment in a third-party data center. Instead of the usual scenario where servers are housed within a room or a section of its own business infrastructure, there isthe option to “co-locate” equipment by renting space in a colocation center.

When migrating assets to a colocation center, keep in mind that:

  • It is a shared facility.With colocation, companies share the cost of power, cooling, communication, and data center floor space with other tenants. It is cheaper than building a new data center.
  • It is best for businesses that require full control over their equipment.Companies can maintain their own equipment the same way they do when servers are installed in-house.
  • It addresses the limitations of an existing data center.Instead of building a new data center, businesses can simply augment their current data center by using the space in a colocation facility.
  • It can give access to higher levels of bandwidth.Housing data hardware in a colocation center gives companies access to higher levels of bandwidth compared to a normal office server room at a much lower cost.
  • It has higher reliability. Data centers in a colocation facility are more reliable. It has greater protection from power outages because of the numerous data backups in placeand provides low-latency networking options.
  • It provides higher levels of physical protection. Colocation centers apply more stringent measures for securing data such as CCTV monitoring, private suites, mantraps, fire detection, and suppression systems.

How does colocation compare with the public cloud?

The main difference between colocation and the public cloud is the way the data is stored and managed. It is a matter of having physical assets versus virtual ones. Like colocation, cloud-based infrastructure services offer cost savings because of shared facilities. But, that is where their similarities end. In terms of cloud services, the cloud provider manages your servers, storage, and network elements. The provider’s staff and not your own is responsible for setting up these elements, cutting capital expenditure and operating expenditure costs. Colocation requires businesses to set up their own servers, storage, and network elements. The downside of this is the additional costs involved in making the move.

Many businesses consider cloud-based services because they prefer to use their data centers for more productive tasks in expanding the business. Others select a cloud provider because of the flexibility of being able to rapidly scale data capacity up or down based on fluctuating business needs.

Understanding how the provider controls access to the environment, manages infrastructure resources, and addresses change management without being physically present is another advantage of migrating to the cloud.

But, the convenience of the cloud has its downsides. Cloud providers may offer the advantage of managing data for businesses, but the conflict lies whenever data expands. More data means additional storage and costs. That’s why experts believe that it is less costly to build a physical data center via colocation. It is more flexible because businesses only rent the space for all assets. It is different from renting the asset itself (the cloud storage) that will be limited based on the subscription.

The Bottom Line

Colocation and cloud services offer businesses alternatives to housing their data. Based on their specific requirements, each service has its unique pros and cons. Does your business put a higher premium on delivery or data security? Do your assets require full control or is convenience your main priority?

Knowing the colocation service that best fits your business needs can go a long way in determining the best course of action.

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