Cloud Computing Services or Colocation?

A business’s data is its most valuable asset.  At the same time, it’s also a particularly vulnerable resource, subject to possible loss via natural disasters, theft, power outages, and viruses.  In an effort to avoid the time and capital investment required to build an in-house data center, more and more companies are turning to alternative data-security approaches.   Two common services offered by data centers are cloud computing and colocation; companies must decide which of these strategies is best suited to their needs.

Cloud Computing

Cloud-based data center services are attractive to smaller businesses and startups.  These services are usually billed in such a way that the customer only pays for the resources it actually uses.  Small businesses on tight budgets appreciate this ability to reduce expenses.  Scalability is another major benefit of cloud computing.   When you host your system in the cloud, you can start with a small initial server setup; when needed, new instances of servers can be spun up immediately.

Cloud computing offloads much of the routine management of your servers and network infrastructure onto the cloud provider; this is a boon to companies working with a lean IT staff.  However, this relinquishing of control is also one of the major downsides to cloud services.  The infrastructure is out of your hands, so it’s important to do your research and select a cloud provider with excellent reviews and a strong proven track record.


For larger businesses with an in-house IT staff, colocation is a popular option.  In this approach, data centers lease space in their facilities to companies in order to house their hardware infrastructure.  Companies maintain their own equipment using this model;  for businesses in industries with tight data-protection regulations, this level of control is necessary to meet requirements.

Colocation is also popular among businesses who have an existing in-house data center, as a secondary infrastructure for disaster recovery.   Despite the many benefits of this model, there are a few disadvantages to consider.  While the total control over your hardware is a selling point to many customers, it’s not the ideal situation for small companies with few, if any, IT staffers.  The need to be at least somewhat geographically close to your data center can make it difficult for companies located in less-populated areas to find a convenient colocation provider.   Finally, the somewhat higher costs of colocation versus cloud services can be a deal-breaker for businesses looking to minimize expenses.

Now what?

As you can see, the best data security plan for your company will depend on a number of factors:  budget, regulatory needs, existing infrastructure and staff.   Ultimately, both cloud and colocation services offer viable alternatives to investing in an on-premises data center.