DNF Editorial Staff

The growth in IT Infrastructure has led to the evolution of deployment models. Four broad models have emerged in the recent years. (1) Build your own Data Center, (2) Buy wholesale space, (3) Purchase colocation services or (4) Host in the cloud. Building a Data Center turns out to be costly and time-consuming, and buying wholesome space can be fraught with maintenance risks. The two most intriguing choices left are to do either Colocation or Cloud.

With Colocation, SMBs can rent our data center space provided by a third party facility. The facility provides the network connectivity along with space that is leased out in the form of rack units, cages, storage cabinets, suites, cabins, and other units associated with a working office. Since several SMBs are sharing the same facilities, infrastructure and receiving maintenance from the same provider, there's an economy of scale cost benefit.

Hosting in the Cloud is an even more evolved model, whereby the facility's cost of collocation is eliminated. The Cloud provider offers computing capabilities, storage, backup facilities and any other digital infrastructure required - as a service. It's also easy to ramp up or ramp down resources and services from the Cloud provider quickly. Even the pricing policies are favorable, with most providers offering a "pay as you go" option. This makes the whole data center configuration dynamic as compared to collocation, which is a little more static.

The differences in the two models beg the debate on which is a better option. To arrive at the answer, one must be aware of various factors that favor each. Some of these factors are:

  • Compliance: If the organization is governed by regulations such as HIPAA, PCI DSS, or Sarbanes-Oxley, will the Cloud provider offer required levels of physical and digital security?
  • Uptime: With both collocation and Cloud, it's good to know the service availability uptime, which can be enforced through SLAs (service level agreements).
  • Support staff: Is the support truly 24x7 or is it time-barred? In case of downtime, what is the process and reporting procedure followed?
  • Racks/cabinets/space – If the collocation is the choice, what are the costs involved in renting out desired sizes of racks, cabinets, cages, cabins etc?
  • Operating costs – Are power and cooling included in the collocation costs?
  • Transportation costs: Every time there is upgradation involved in a collocation scenario, what will be the total cost of transporting equipment and setting them up?
  • On-site engineering – Once the new equipment has arrived, how much would it cost to engineer or migrate the systems from the old to the new?

Undoubtedly, both Colocation and Cloud have their own pros and cons and the decision will depend on the nature of the company's business. The final decision more often than not depends less on cost and more on: compliance, need for privacy, need for direct control, and service availability uptime. Contact DNF to discover what's best for your organization.