Physical versus Virtual Assets: Comparing Colocation to the Cloud

Management and improvement of data centers is a complex challenge for businesses. However, companies strive to find cost effective computing solutions for dynamic development that benefit all stakeholders.

Although this developmental need manifests in multifaceted ways, the discussion around data repositories rises to the forefront. Companies are seeking the latest hosting options as the IT industry continually heads towards next-gen data management and virtualization.

Companies can compare on-premise colocation hosting solutions to off-premise solutions within the Cloud.

What is Colocation (colo)?

Colocation is a solution that provides on-premise hardware. Defined, it is “a data center facility in which a business can rent space for servers and other computing hardware” and commonly is used in two categories. It can function as wholesale, where companies lease fully built space, or retail, where spaces are leased in smaller sections. The centers themselves are certified according to Uptime Institute’s tiering classification, ranging from a Tier 1 to a Tier 4 system.

Functionally, a business places their servers in such a physical location. This allows them to use the location’s bandwidth and infrastructure to process data while the business still retains ownership and management over various components.

What is the Cloud?

The Cloud is an off-premise hosting solution that functions as a cloud-based data repository. Functionally, it provides services through the Internet to provide various offerings directly instead of by means of physical storage. Payment is typically remitted for usage of the computing resources, and the Cloud services takes hold of various responsibilities that may be maintained in colocation solutions.

The cloud has various iterations and can be private, community, public, or hybrid.

Comparing Colocation to the Cloud

There is a myriad of reasons for a company to choose either colocation or the Cloud. When evaluating, keep specific factors in mind.

Benefits of colocation

Many choose colocation options because this allows for ownership to be maintained that can be lost in the Cloud. The system enables high density and hyperconverged computing because of its extensive power and cooling components and also has benefits when considering capital expenditures (CAPEX). Colocation centers are associated with bandwidth and security benefits.

Considerations within colocation

When evaluating this solution, be sure to look for server management and maintenance agreements as well as associated fees to avoid re-negotiation. Be sure to check the self-monitoring and management functions as well as the SLAs.

Benefits of the Cloud

The Cloud can often have a more flexible pricing structure and implementation ease as well as efficient server setup. Although often purported less secure, these off-premise hosting solutions actually offer firm security features through private-key decrypting and user-centric secure storage through cloud-based partitioning with corresponding specific indexing criteria.

Considerations within the Cloud

When evaluating this solution, note that only some companies can build the massive needed infrastructure for such data center hosting which can limit options. With the risks associated with such hosting, try mitigating risks through DCIM systems beyond only monitoring.

Comparing Colocation to the Cloud

All in all, both colocation and the Cloud have benefits when it comes to data hosting. Some companies choose only one or the other, but others opt to put mission-critical functions in colocation provisions while keeping daily tasks in the Cloud.

Decisions should be made through individualized asset-based evaluation.


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