Cloud vs Colocation - Everything You Need to Know

In the face of growing cost pressures, organisations are switching to cloud and colocation platforms. When discussing cloud and colocation services, we often hear both terms used interchangeably. Despite serving the same purpose, colocation and cloud services are completely different concepts.

Here’s everything you need to know about cloud services and colocation services, including how they are different.

Introduction to Cloud and Colocation

When you hear the term, “cloud migration,” it’s often about moving your existing workload or application from your current premise to another location. However, the reality is that the cloud is not a place or location. Instead, cloud solutions are a mix of infrastructure assets, technologies, services, and tools that can help in cloud transformation.

On the other hand, colocation services are linked to a place and location. Commonly, a colocation is the physical space (or data centre) that organisations can rent for running their IT infrastructure. For instance, an organisation can now host private cloud services inside a colocation facility. This is not the same as building a private cloud solution.

Here’s how cloud services differ from colocation services in each of the following areas:

1. Infrastructure Ownership and Management

When it comes to ownership and management of the physical infrastructure, colocation platforms require companies to provide their servers and storage, maintained in the colocation facility. Thus, in colocation, the businesses completely own and control their resources and hardware equipment.

On the other hand, in cloud infrastructure services, cloud service providers own and control the infrastructure required to host cloud services. The difference is in the way both platforms store and manage organisational data.

2. Scalability and Resource Allocation

Both the cloud and colocation enable companies to scale up (or down) their resources based on their needs. Comparatively, cloud infrastructure services offer more scalability for companies with changing workloads. The cloud is more scalable and flexible than colocation platforms.

Colocation services are less scalable and flexible and depend on the level of the company's investments. Scalability is also limited based on the processing capacities of the data centre.

3. Cost Considerations in Cloud and Colocation

When compared to on-premises infrastructure, both cloud and colocation services provide significant cost savings to growing businesses. With public cloud services, service providers can provide shared storage and resources, thus saving costs. Colocation facilities are also shared in data centres; however, companies still need to spend money on equipment and resources.

Cloud infrastructure services incur lower costs in the initial phase of any company. However, with increasing resource consumption and data volumes, public cloud services can attract more expenses. On the other hand, colocation is more costly than public cloud platforms. However, they offer more control and security, thus saving expenses in the long run.

4. Data Security and Compliance

In the case of cloud platforms, data security is dependent on the cloud service provider selected by the company. Overall, public cloud platforms are more vulnerable to phishing attacks and data breaches. Hence, they cannot fully guarantee data security and compliance.

On the other hand, colocation services offer businesses complete control over their data security. Colocation facilities do offer complete physical security (within the data centre), along with better disaster recovery capabilities than cloud providers. Additionally, colocation data centre providers ensure complete regulatory compliance regarding data security and privacy.

5. Performance and Latency Considerations

Similar to data security, performance and latency depend on the cloud service providers chosen by the company. Due to their dependence on Internet speeds and network connections, cloud services are vulnerable to service disruptions. Cloud services could also face limited processing capabilities, which can lead to poor performance and latency.

In the case of colocation services, the physical infrastructure is owned by the company, thus providing them more control over performance and latency. 

6. High Availability and Redundancy

The prominent cloud service providers offer services that are spread across multiple data centres and geographical locations. This enables them to provide high availability and reduce the risk of any downtime.

Similarly, colocation service providers can also provide high availability and redundancy (through their data centres), and adapt to different customer needs and requirements.

Hybrid Approaches and Multi-Cloud Strategies

With a hybrid cloud (or multi-cloud), organisations can combine their private and public cloud service. For instance, they can process sensitive data (like customer data) through the private cloud to maintain data integrity.

With hybrid cloud, organisations can also run one (or more) private cloud services with one (or more) public cloud services. Although they are fundamentally different, a colocation service shares similarity with a private cloud environment. However, other than physical space, colocation facilities cannot provide any cloud-managed services and resources to their customers.

Industry Use Cases and Adoption Trends

Colocation services are more suited for the following industries and types of businesses:

●  Large companies with specific hardware and software requirements, require more control over their cloud environments.

●  Financial companies that operate under stringent industry regulations, thus requiring more control and transparency.

●  Telecom companies that need direct physical access to network providers (within the colocation facility)

●  Government agencies and defense companies require higher control over their data security and transparency.

On the other hand, cloud services are suited for the following industries and types of businesses:

●  Startup companies that require more flexibility and have limited budgets.

●  eCommerce companies that need scalability to increase (or decrease) their operational capacity based on customer demand.

●  Software development companies that require a virtual environment to develop and test their software products.

●  Educational institutions that need the cloud to manage their online learning courses.

Future Trends in Cloud and Colocation

Here are some of the future trends in the domain of cloud services:

●  Gartner estimates that 35% of data centres will operate on the cloud by 2027.

●  More organisations will refactor their cloud infrastructure services for optimised costs.

●  According to Gartner, 60% of data centre infrastructure will be automated by 2027.

Colocation facilities will adopt AI and machine learning to improve their operational efficiency and business agility. Going forward, the industry will witness an increasing demand for multi-cloud (or hybrid) services.

By partnering with Vi Business, enterprises can leverage the best of both cloud and colocation services for their benefit. Our cloud-based solutions for business are customised to meet specific requirements.

If you are interested in knowing more, request a call back today.

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