Understanding the Difference Between Cloud Hosting and Colocation

two women standing in security room

Should you host in a colocation facility or the cloud? 

It’s a question many businesses ask themselves at one point or another. In order to answer it, one must first understand what each term actually means. Because although there are plenty of people who use the two interchangeably, the reality is that they are vastly different in terms of functionality.

What is Cloud Hosting?

Cloud hosting provides an organization with distributed, on-demand access to computing resources. Dynamic, hardware-independent, and highly scalable, cloud hosting plans can accurately simulate virtually any operating environment. In broad strokes, there are three types of cloud hosting deployments:

  • Public clouds share computing resources between all clients on the platform.
  • Private clouds are dedicated entirely to the needs of a single client. 
  • Hybrid clouds are, as the name suggests, a combination of the two. 

The best analogy we’ve seen to explain cloud hosting comes courtesy of Vivek Kundra, a former federal United States chief information security officer. 

“There was a time when every household, town, farm, or village had its own water well,” says Kundra. “Today, shared public utilities give us access to clean water by simply turning on the tap; Cloud computing works in a similar fashion. Just like water from the tap in your kitchen, Cloud computing services can be turned on or off quickly as needed. Like at the water company, there is a team of dedicated professionals making sure the service provided is safe, secure and available on a 24/7 basis. When the tap isn’t on, not only are you saving water, but you aren’t paying for resources you don’t currently need.”

What is Colocation? 

Colocation represents a sort of middle ground between leasing a dedicated server and constructing your own data center. With a colocation plan, an organization rents floor or rack space in an established data center. That space is theirs to do with as they wish, and they typically provide and maintain their own hardware (though some colocation sites offer hardware maintenance as a managed service). 

One of the most significant benefits of colocation is that the organization leasing the space gains access to all the amenities of the data center. These may include carrier networks, power, cooling, and physical security. A good analogy is to think of colocation like renting an apartment or condo. 

What’s the Difference Between Cloud Hosting and Colocation?

There are several key differences to be aware of when comparing cloud hosting and colocation.

When you host on the cloud, you’re explicitly leasing resources. Hardware management is seldom directly involved. With colocation, you’re renting physical space where you can situate your own hardware resources. 

Cloud computing also typically involves usage-based pricing, whilst colocation space is leased at a flat rate. In exchange, you have a great deal more control over your data and infrastructure, even compared to hosting on a private cloud. A cloud hosting plan is also far likelier to include managed services as a value-add than colocation, though this is not always the case.