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Colocation vs. IaaS: Which is Right for My Business?

The Headlines, On-Premise, IaaS, Infrastructure as a Service, Infrastructure, Colocation, Co-location, Colo

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Colocation and Infrastructure as a Service (IaaS) both offer incredible benefits, but when choosing between them it’s crucial to consider what your business brings to the table. Receiving the benefits of either service is only possible when paired correctly with the characteristics, resources, and assets of your individual business.

In this blog, we explain the basics of colocation and IaaS and ask three questions that will help you determine which solution is the right fit for your business.

What are Colocation and IaaS?

Colocation, also known as co-location or colo, allows your business to rent from a provider the physical space, power, redundancies, and cooling needed to house your own hardware.

  • You are responsible for the software and buying, installing, managing and maintaining data center infrastructure, including storage, servers, backup, and manpower
  • Your provider is responsible for regulation-compliant maintenance and physical security of the building, plus redundant power and cooling

Infrastructure as a Service (IaaS) is a cloud computing service where a third-party provider purchases, installs, and manages data center infrastructure for you, allowing your business pay-as-you-go use of storage, networking, and computing resources via the Internet.

  • You are responsible for buying and managing software (operating systems, applications, etc.)
  • Your provider is responsible for handling infrastructure, including managing, servicing, and supporting physical data center components (space, servers, storage, networking, virtualization, cabling, etc.)

Co-location and IaaS both offer advantages over building and managing your data center on-premise, including:

  • Cost-efficiency and less burden where you only pay for what you need when you need it
  • Improved performance and reliability thanks to a professionally designed and maintained environment
  • Top-notch physical security for your servers to keep data safe
  • An increase in performance and reliability if your provider additionally offers network services
  • 24/7/365 monitoring
  • Better business continuity and disaster recovery (BC/DR) because your data won’t be in the same location as your office building
  • Faster time to market because you can easily increase the amount of space you need
  • Flexibility because if your office building moves geographic locations, your infrastructure won’t have to move with it
IT Engineer installs enclosure with hard disk drive in the storage system in the rack in datacenter as IaaS or Colocation concept

3 Questions to Determine What’s Right for You

1. What does your current IT team look like?

Choose colocation if… you have a team of experts in-house with enough manpower to keep up with the demands of caring for data center infrastructure. Your team should have experience and expertise across several IT disciplines including networking, servers, virtualization, storage, cabling, backup/recovery, disaster recovery (DR), and compliance.

Choose IaaS if… your team doesn’t have the right expertise, numbers, or experience in building a data center. The quality of your team is integral to the success of your solution. Thinking your team can handle it when they’ve never built data center infrastructure before could be a costly mistake. With IaaS, your provider supplies a team of experts across multiple disciplines of IT that will have your back, managing your infrastructure to ensure smooth operations.

2. How important is the scalability of your infrastructure?

Choose colocation if… the cost savings of owning your infrastructure outweigh the cost and burden of adapting your infrastructure to business changes. Co-location offers easy scalability of physical space, but you must still scale infrastructure yourself.

Choose IaaS if… you want to be able to quickly scale infrastructure up and down as needed. If your business is new, constantly testing new products, or wants to get products to market quickly, IaaS is an ideal solution thanks to the quick and easy scalability of both the space and infrastructure it provides.

3. How much infrastructure do you currently own?

Choose colocation if… the sheer size of your operations and data center needs currently diminish the cost-efficiency of pay-as-you-go infrastructure use. At a certain point, a business will save money down the line by investing in ownership of their own infrastructure rather than renting it. This ownership offers fine-tuned control of your infrastructure and is smart cost-wise for some larger businesses.

Choose IaaS if… you have little to no current investment in infrastructure. IaaS means you don’t have to pay the initial start-up costs of purchasing and building infrastructure. Plus, with the pay-as-you-go model of IaaS, you’ll only have to pay for what you use when you use it, offering cost-efficiency and flexibility as your business grows and changes.

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Is IaaS or Colocation Best for Your Business?

Colocation and IaaS both offer cost-efficiency and improved operations, but in order to determine which solution is the right fit, you must consider the unique characteristics and needs of your business.

Once you’ve decided between IaaS and co-location, be sure to choose your provider carefully to ensure a successful transition, excellent support, and continued success with your chosen solution.

Still have questions or want more information on IaaS and colocation? Sign up today for a free, zero-obligation, one-hour tech assessment with LightBound. Our experts will meet with you in person to help you determine the best solution for your business, considering your specific attributes and needs while answering any questions you might have.


September 27, 2018 / by Dane Dittemore