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Many companies that toured our Midwest colocation facility this year have been considering cloud computing versus colocation for their secondary data center site.

Many of them have given great thought to the theoretical advantages and disadvantages of one versus the other. But a surprising number have not done the math.

Here’s a few things we’ve noticed as companies we know have gone through the decision making process.

Some companies want to get out of the hardware business, no matter what it costs. If the company’s mission critical applications can behave well in a cloud-based environment, then there is good potential for success. But doing the math will provide clear understand the cost difference between “renting cloud space” and owning or leasing computer hardware that resides at a colocation facility. Is it worth double or triple the cost?

Many companies are surprised at the total three year costs for cloud services. They find that purchasing hardware and software licensing and doing it themselves, is much lower total cost than the cloud alternative. But they don’t really know until they do the math.

Some of Lifeline’s colocation customers started out using cloud services, but have switched to owning their equipment and operating it from a colocation facility. These companies did the math and determined that for the current circumstances, cloud computing was no longer a cost-effective platform on which to build their services.

Are you considering cloud versus colocation? Have you done the math?

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