When is colocation a better fit than cloud computing?

When is colocation a better fit than cloud computing? That's one of the most frequent CIO and data center strategy questions we hear as companies tour our Indianapolis colocation facility.

Let's define terms.

Colocation is outsource data center facilities: hardened data center buildings, power redundancy, cooling redundancy, physical security, fire suppression, and access to telecommunications carriers. Colocation providers could also be called high-tech landlords, providing data center as a specialized real estate offering.

Cloud computing is many things (read up on cloudwashing), but generally it is one of more computing resources delivered via the Internet. Many companies use cloud computing to eliminate the need to buy and own disk storage, servers, network and security devices.

Let's assume that high data center uptime is a requirement, regardless of whether a company uses colocation or cloud computing. Most companies expect at least 99.995% uptime for their production data center. 99.995% uptime is 28 minutes of downtime per year or less. The cost of downtime for companies like this is almost always a combination of lost productivity, lost revenue and lost clients. Both colocation and cloud computing can offer high data center uptime.

Here are a few instances when cloud computing may be a better fit.

Companies are in start up mode and are trying to keep costs low.
Cloud computing offers low start up costs, almost no capital expenditures up front. Cloud computing typically offers server and network management as part of the service, so the need for on-staff IT help is also reduced.

Scalability (cloud bursting) is a key requirement.
A few of the more sophisticated cloud providers offer the ability to protect a company from its own success, i.e. an onslaught of web visits without a crash. Think of a successful marketing campaign that drives so much traffic that your website topples under the load. Cloudbursting offers a solution to this problem.

Avoidance or reduction of on-staff IT support.
If a company is trying to cut IT staffing costs, cloud computing can offer the benefits of IT delivery support without the FTE burden.

Here are some of Lifeline Data Centers' observations on when colocation is the better fit.

Companies wish to control the hardware that supports their applications.
This is often a result of the applications a company uses. Many mission critical applications require extra memory, processor power, and/or network resources to meet performance goals. Controlling all hardware components end-to-end improves reliability and performance.

Companies wish to own and operate their own hardware, for whatever reason.
This could be to take advantage of sunken costs, to leverage lower costs of owning hardware over time, or just because it's important for the CIO to own his own hardware.

Data center compliance and certification requirements are complex.
HIPAA, FDA, FISMA, NIST, PCI/DSS and SOX compliance are easier to manage in a physical data center than a logical of virtual data center offered by cloud computing.

Companies need access to multiple telecommunications carriers.
This is not exclusive to colocation. However colocation providers that deliver carrier neutral data centers with no cross connect fees are more common that cloud computing providers who offer the same flexibility.

Cloud computing and colocation are not mutually exclusive. Many companies utilize cloud resources via their colocation facilities.

What are your requirements for the next generation of your data center? Will you choose colocation, cloud computing, or a hybrid solution that includes both?

Alex Carroll

Alex Carroll

Managing Member at Lifeline Data Centers
Alex, co-owner, is responsible for all real estate, construction and mission critical facilities: hardened buildings, power systems, cooling systems, fire suppression, and environmentals. Alex also manages relationships with the telecommunications providers and has an extensive background in IT infrastructure support, database administration and software design and development. Alex architected Lifeline’s proprietary GRCA system and is hands-on every day in the data center.
Alex Carroll