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Colocation vs The Cloud: What’s Best For Your Business?

Blog Post
June 1, 2021

How do you choose the best hosting solution for your organization? While many businesses opt to migrate from on-premises hardware to hosted solutions, finding the platform that meets your unique needs is essential. Let’s discuss two standard options, the cloud and colocation, and identify which is right for your business.

Colocation Pros and Cons

Colocation is the practice of housing privately-owned servers and networking equipment in a third-party data center.

Economies of Scale

One of the main benefits of colocation is economies of scale. If your organization is already heavily invested in physical data storage and hardware, you’re able to reduce the costs of maintaining your hardware.

As your organization grows, so do the rapidly expanding costs of storing your hardware in its facility, not to mention the power costs and cooling requirements that your equipment needs. Colocation is built to optimize these processes for multiple organizations. Thus, your business can expand its hardware and data management without the burgeoning costs that would entail if you stay independent.


Scalability is another benefit – you’re only paying for space, power, and hardware you’re using with colocation. That means you can use as much or as little as you need, without worrying about additional costs. You gain greater flexibility and resilience in challenging times, allowing your operation to grow or shrink as needed.

Cons of Colocation

“There are drawbacks to colocation, however. Colocation centers can vary in the services they offer, and some centers may lack all the connectivity options your business needs. Suppose a colocation center has a particular relationship with certain carriers. In that case, you may be locked into using this carrier for your data needs, hindering flexibility in the future,” says Hans Adams, a tech writer at Boomessays and Essayroo.

However, carrier-neutral colocation is designed to offer organizations top choice when using colocation. Choose your colocation provider wisely to mitigate these risks.

Choosing The Cloud

Colocation’s main competitor as a data infrastructure management system is cloud hosting. Cloud hosting strips back the necessary hardware and gives organizations access to hosting on a decentralized network. Using the cloud entails a virtual model of hosting – rather than renting physical space for your hardware, you’re choosing the virtual cloud-based space.

Cloud-based providers offer an easy way into data infrastructure. Organizations that haven’t yet invested in hardware solutions can take advantage of the cloud right away, with limited set-up costs, and quickly scale your data operations to your needs.

“However, using the cloud entails a loss of control. You never own the hardware that stores your data, and the servers are often obfuscated, meaning there’s a lack of visibility around security and storage. Colocation offers maximum control compared to cloud-based solutions,” explains Daniel Lason, a blog writer at Write My Essay and Paper Fellows.

Consideration of Cost

 Naturally, the cost is one of the primary considerations for any business. While colocation requires businesses to invest heavily in hardware, these are often one-off investments that reduce the long-term running costs.

With cloud-based services, you’re paying annual fees for the privilege of hosting. If your business wants more control and can afford the upfront costs, colocation can be an economical choice in the long run.

Considerations of Compliance

Compliance is essential, and if regulations around data are changed regularly, keeping up with it can be a headache. An effective cloud service will handle compliance on their end, taking it out of your hands and letting you focus on the day-to-day.

With colocation, you still own your hardware and will need to manage compliance. Often, that means extra work for the IT department and more costs incurred for your organization. If compliance is a concern, cloud services can be a big help.

Considerations of Security

Compared to in-house data infrastructure solutions, both cloud-based and colocation services offer superior security. A reliable cloud-based service will offer a complete security solution, both virtually and physically, whereas you will still handle collocation cybersecurity requirements in-house.

If you like to take a hands-on approach to security, then colocation gives you greater control. With cloud-based services, you’re putting your faith in the host.

Making The Choice

If your organization has already invested in the infrastructure of an IT network and the related costs of hardware, colocation could be the best choice for your business. Colocation is a solution to a business’s hardware challenges – and it effectively involves access to a physical space where you can store hardware, servers, and other equipment.

Factoring in cost, compliance, and security, as well as your current state of investment in hardware, will help you decide whether cloud-based hosting or colocation is suitable for your organization. Many businesses choose a hybrid approach, outsourcing the bulk of their data to the cloud while maintaining critical data on local servers in colocation facilities. The choice is yours.


Lauren Groff is a professional writer at Buy Essay and Write My Thesis who has been involved in tech projects since the early 2000s. She loves the tech industry for its fast-paced energy and the creativity of the constant cycle of challenge and solution. Lauren also is a manager at State Of Writing service.

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