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Colocation services vs. cloud hosting -- which should you choose?

Colocation services and public clouds move IT workloads out of your corporate data center and into theirs, but the similarities end there.

Whether you should use cloud hosting or colocation services depends on how you want to implement private

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and hybrid enterprise cloud. Colocation services can be a gateway to hosted private cloud or to a hybrid cloud that bypasses public Internet connections.

Here, colocation and cloud service providers answer IT pros' questions about which approach to take.

Should we use colocation services or cloud hosting?

There are several reasons to avoid the leap from an on-premises data center to a cloud-hosted infrastructure. Enterprises with existing IT equipment can waste a lot of invested capital by turning to cloud hosting. Instead, IT could move its infrastructure into a colocation provider's modern facility with room to grow but no loss of control.

It's a common misconception that colocation is just a box for your equipment.

In addition, enterprises still don't trust cloud over their own on-premises data centers, said an enterprise architect at Southborough, Mass.-based GlassHouse Technologies Inc., citing self-ownership of business-critical applications and sensitive data.

That tight control means sacrificing convenience. While colocation services offer security, resilience, up-to-date facility infrastructure and high uptime, it's also very much a do-it-yourself project. Teams must piece together IT infrastructure with management, monitoring and automation tools, said Simon Withers, a product manager at Wayne, Pa.-based SunGard Availability Services, which provides both colocation and cloud hosting.

"Cloud is the new colocation," Withers said. "The challenges are the same; the difference is that you're dealing with virtual assets versus physical ones."

A counter trend has also emerged.

"Applications that grew up in the cloud are now too expensive to live there. ... It's cheaper to build out an owned 'base' data center and rent the 'burst' in the cloud," said Bryan Chong, a sales representative at San Francisco-based Digital Realty, which offers colocation and data center builds.

Many companies often reassess its public cloud-based workload strategy after reaching a tipping point with soaring cloud costs.

Spending too much monthly on a cloud infrastructure you don't control starts a lot of discussions, said Wes Swenson, CEO of C7 Data Centers Inc., a Utah-based colocation company.

Why not both?

Enterprises don't have to choose colocation or cloud. It's about colocation and cloud services coexisting so IT can evolve, GlassHouse's representative said.

Whether an organization builds a private or hybrid cloud infrastructure, colocation offers plenty of benefits. Since uptime expectations are included in a cloud provider contract, colocation can help define availability, recovery point and recovery time objectives. Colocation facilities can also mix and match a hybrid cloud stack, with multiple connections for public and private cloud elements.

Customers can connect to public cloud providers without using the public Internet via direct connections at colocation providers, such as Equinix Inc., which has 100 colocation facilities globally. It installs access hubs to Microsoft Windows Azure, Amazon Web Services and other cloud platforms in its colocation centers with private network connections.

Another colocation provider, EvoSwitch, wants to bring the Internet exchange model from Europe to the U.S., with a London Internet Exchange Ltd. hub in its Manassas, Va. data center.

"We're in the reasonably early days of hybrid cloud," said Ian McVey, head of systems integrators at Interxion Holding N.V., a European carrier-neutral colocation provider. "Cloud migration tools are still in the beginning stages," but connection-rich data centers are strong foundations for working hybrid cloud infrastructures, he said.

Even in tightly centralized IT shops, some infrastructure lives elsewhere, noted Raouf Abdel, Equinix's operating chief.

"Instead of putting, for example, Microsoft software on an on-premises server or on a server in a colocation data center, you're buying licenses to access that software from the cloud," he said.

Many colocation providers offer networking services, cloud services and other options beyond straightforward colocation, said James Kozlowski, vice president of colocation business development at CenturyLink Technology Solutions.

It's a common misconception among enterprises that colocation is "nothing more than a box to house compute," said Dan Golding, VP of operations at Iron Mountain Inc., which operates several colocation centers in the U.S.

As with colocation, cloud hosting for the enterprise succeeds or fails with the right partner.

"Hyperscale commodity cloud providers are unlikely to give the average enterprise any flexibility in terms, but enterprise-focused cloud hosting companies are likely to work in partnership with the customer," SunGard's Withers said.

He recommends phased cloud adoption with due diligence on application management, proof-of-concept trials and clear metrics.

This was first published in February 2014

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