Colocation, in-house data center and public cloud.

The Role of Colocation in Cloud Delivery

Colocation is one of the basic building blocks of Cloud Delivery services. It's a data center service model that lets you use your own equipment, while benefiting from scale efficiencies by sharing floor space, physical security and infrastructure for power and cooling as well as bandwidth with other data center tenants.

Delivering cloud requires services at different layers. One basic building block is colocation, which is a data center service model. It allows you to use your own equipment while benefitting from scale efficiencies by sharing floor space, physical security and infrastructure for power and cooling as well as bandwidth with other tenants in a colocation data center.

When a company comes to the point when they have outgrown their current data center solution or have reached the end-of-life of their IT infrastructure, they have several options to choose from:

  • Build an in-house data center
  • Launch servers on a public cloud platform
  • Colocate the servers in a third-party data center
Three choices when deciding the data center solution: Colocation, Public Cloud or In-house Data Center

In-house, Public or Colocation?

Building an in-house data center rarely makes sense, either economically or logically. Not only does the company miss out on the scale benefits that come with sharing the physical resources, but all the IT-related areas are developing so fast that dedicating in-house expertise to building and operating data centers pays off. Those resources and the key personnel could instead be allocated to focus on innovation and company growth.

Public cloud is popular particularly among small companies as it enables them to leverage the flexibility in services and only pay for the resources that are used. Public cloud also has the flexibility that automatically scales the services if there is a sudden spike in users. The public cloud further has a reputation as a cost-efficient option, but that depends on the applications and how the public cloud is used. Many enterprises have had to migrate back from the public cloud because of the high costs.

If an organization wants to maintain complete control over their equipment and ensure the highest possible performance, colocation is often the best option. Companies that specialize in colocation are able to offer data center space that is cheaper, more secure and more reliable than an in-house data center. It is also important to note that the public cloud like agility and flexibility can also be achieved with colocation solution.

Technical, licensing and data security requirements may cause an organization to need colocation instead of the public cloud. The same is true for governance. Managing, controlling and maintaining public cloud instances that have been bought by users with different credit cards can quickly become a nightmare with a huge bill.

Choosing the data center solution

The main driver for selecting the data center option should come from the strategy and business models as well as the application requirements. Sometimes the decision can be driven by almost fanatical belief in a certain cloud platform, possibly driven by an army of consultants, whose business is to help you move to that specific cloud. It is important to compare the real pros and cons first. For most businesses, the future is a multi-cloud platform, that leverages multiple resources in the public cloud and in colocation data centers.

Investing up-front in server hardware and placing it into a state-of-the-art colocation data center is more cost-effective solution than going all-in on public cloud infrastructure. When the main concern is to get the best possible ROI on the infrastructure, colocation solution offers the optimal option.