Colocation vs. Cloud Hosting

In this day and age, technology plays an important role in connecting, carrying out as well as managing the various tasks related to the daily operations of any company.  Every organization’s operational success depends to a large extent on its mission-critical applications and the efficiency of its network infrastructure. Hence, it becomes vital to have an IT infrastructure that is efficient and which enhances productivity. Regardless of whether an organization is setting up its IT infrastructure for the first time or it is migrating from an in-house solution to a cloud solution, it needs to find the most effective solution that caters to its requirements, suits its budget and boosts the company’s productivity. Two of the most frequently chosen options are colocation and cloud. The aim of this blog is to provide information about each of these, including its pros and cons.

Colocation Services

Colocation services are provided by colocation centres, which are essentially data centres that rent equipment, bandwidth and space to their clients. The necessary facilities with regard to providing power, space, cooling and storage are offered in collocation service, along with ensuring the physical security of servers and networking equipment of the client firms.  Colocation services offer a cost-effective IT solution to companies, which aids in minimizing the complexities of IT infrastructures’ management. When companies have in-house equipment (servers and other computing resources) they need to be well-equipped in handling the tremendous cooling and power requirements that such resources demand in order to run optimally. This becomes an additional cost for the company and can be quite substantial in the long run. The cost and the effort that is needed in efficiently running these IT resources can be curtailed significantly with the aid of colocation, wherein the services of a third-party data center are availed. In colocation, a company’s server and computing resources are placed in a third-party data centre and its bandwidth and infrastructure are used for the purpose of processing data. In colocation, the client company retains its servers’ ownership and utilizes the colocation service’s facilities to gain access to more bandwidth and enhanced security.  Many a time, colocation services include agreements that have to do with server management and maintenance, which are separate services that are offered at a monthly fee by the colocation service provider. This service aids companies in such situations where it is not possible for them to send their own IT teams to the colocation centre regularly.

In a nutshell, colocation proves to be a very beneficial service, which enables companies to store their servers and other computing resources in a secure colocation centre, that provides public IP addresses, bandwidth and takes care of power supply and cooling requirements that are needed by its clients’ servers and IT resources.

The Benefits and Drawbacks of Colocation

Colocation has its share of benefits and drawbacks, which shall be touched upon in this section of the blog.

The Pros of Colocation– Colocation as a service is utilized by companies of all sizes because of the various benefits that it has to offer. It helps small businesses reap the benefits of using powerful IT infrastructure, without having to incur capital investment. It also lets medium to large-sized business expand their existing IT infrastructure in a cost-effective way.

The main benefits of colocation have to do with ensuring better connectivity and providing enhanced network security, power redundancy and bursting capability. Moreover, colocation lets a company expand its infrastructure quickly in order to let it manage its growing business requirements efficiently, without incurring substantial capital expenditure for this purpose.

Colocation not only ensures better connectivity but also provides improved security of network, as the colocation centres implement the most powerful security measures, which include the latest firewalls and IDS (Intrusion Detection System). Power redundancy is ensured by colocation centres by following very effective maintenance practices and by using combination of resources (multiple power grids, double battery backup systems etc.).

Colocation service offers its clients bursting capability, wherein they have the flexibility to utilize higher bandwidths for accommodating their traffic demand without having to incur repeated capital expenditures. Last but not the least, if a company is considering cloud migration as a solution for the near future, then colocation ensures a seamless transition by enabling the company to move its IT equipment to an off-site facility.

The Cons of Colocation– The major drawbacks of colocation service include high start-up costs initially and the need to purchase equipments and their updates. Since a company incurs fluctuating costs every month, which depend on bandwidth usage, budgeting becomes challenging. Often there can be vendor lock-in.  Additionally, it is not always easy to locate a colocation centre that is near one’s company’s location. There can be situations where carrying out maintenance of server is not possible due to the time restrictions that are imposed by a company’s colocation service provider. Moreover, in colocation, the company is responsible for maintaining its own servers. Hence, such a company needs competent IT staff for this purpose.

Cloud Hosting

Cloud hosting is one of the types of web hosting in which multiple servers are used for load balancing and for maximizing uptime. In it, rather than using a single server, a website utilizes the resources from a centralized pool, enabling it to run seamlessly. When one server fails, the other servers ensure that the website remains up and running. Every client gets a certain part of this cloud cluster, which uses the resources of a centralized pool. Cloud solutions enable one to spread one’s data across many servers that are interconnected and which exist in a virtual environment.

The service of cloud hosting is provided by web hosting companies. Web hosting companies provide the server space and the necessary services and technologies that render a website accessible over the Internet.  The most preferred web hosting service providers are usually referred to with terms, such as the “Best Cloud Hosting Company”, the “Best Website Hosting Company”, the “Best Linux Hosting Company” etc.

The Benefits and Drawbacks of Cloud Hosting

Cloud hosting’s popularity stems from the fact that it has many benefits. Both, its benefits and drawbacks, shall be elucidated in this section.

The Pros of Cloud Hosting- The main benefits of cloud hosting are that it makes it easy to scale server resources, provides high uptime and availability, along with faster website speed and offers flexible pricing plans as one pays only for the amount of resources that have been consumed. Another advantage of cloud hosting is that it ensures a swift setup process for servers. Cloud hosting servers can be deployed in no time. Cloud hosting provides easier load balancing among multiple server environments. The advantages of cloud hosting make it a popular choice for businesses and more and more companies are migrating to the cloud to reap its benefits.

The Cons of Cloud Hosting– The main drawbacks of cloud hosting have to do with its vulnerability to cyber-attacks and concerns related to its security. The other disadvantage is its dependency on the Internet. Cloud hosting service relies on a servers’ network, which needs Internet connectivity to function. Hence, any issues in Internet connectivity will cause problems. Since, cloud servers are accessed over the Internet, the speed of the Internet connection determines the speed of connection to the server. Moreover, one’s access to one’s own server is controlled by the hosting service provider as it is the cloud hosting service provider that owns and manages the servers.  Some companies, as the clients of cloud hosting service providers, are not comfortable with this lack of control and lack of total visibility. Moreover, companies that avail cloud hosting need to have a contingency plan in place for any untoward situation where the service provider goes out of business unexpectedly.


A business must take stock of its existing IT infrastructure, its requirements with regard to its future goals and expansion plans, along with its budget, and then choose between the options of colocation and cloud hosting. After weighing the pros and cons of both, colocation and cloud hosting, a company will be in a better position to ensure that it opts for the best solution to enhance its productivity and meet its aims in the most cost-effective way.

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