By: Michael Dehoyos, Content Marketer/Editor at Ph.D. Kingdom, Academic Brits

In a computerized world, modern businesses face a host of essential data management and technology responsibilities that take up valuable time and effort. Outsourcing to remote computing choices is a great way to cut costs and receive efficient and on-demand computing services like storage, networking, analytics, and tech support. The Cloud and Colocation are two possible services that companies can use to drive business value, obtain flexible resources, and give their business a competitive advantage. 

Businesses have to consider what each of the services offer and look at the pros and cons to figure out whether the cloud or colocation is the right option for them. 

What is Cloud computing? 

Cloud computing offers an effective and easy to use service for customers. Computing services are provided on-demand, directly over the internet and on a pay-as-you-go basis. The cloud service provider is responsible for maintaining the networking infrastructure as well as keeping customer data secure. 

In 2022, the value of public cloud services is forecast to increase to over 350 billion USD; the market is growing quickly and there’s a good reason why. Cloud computing offers many advantages. Primarily, cloud computing is fast. Within seconds of being online, services and resources are available for use. The convenience and speed of services is a big reason why many businesses choose this option. Cloud computing also offers the added benefit of automatic software integration. Unlike some data outsourcing options, there is a need for complicated time-consuming integration processes in order for the software to be fully optimized. A great feature of cloud computing is the flexibility of storage. At no extra cost, you get unlimited storage capacity with the cloud. If you need more, the expansion of storage capacity is available at a small fee. 

What is Colocation?

“Colocation is the integration of a physical data center comprising floorspace, internet connection, and electricity with a range of IT services. The third-party data center provides a business with the bandwidth and infrastructure necessary for processing data and a large power density that is vital for supporting new technologies,” explains Carl Finn, a business writer at and Additionally, a monthly fee is paid for maintenance and server management, meaning businesses don’t have to spare their own staff. 

In 2023, revenue from the colocation market is expected to increase to 50 billion USD. Colocation offers some great advantages that can be really useful to the right businesses. Colocation is special for it’s enhanced connectivity. They provide trusted stable network connections that prevent any interruptions of customer applications. Additionally, the impressive infrastructure that comes with colocation, including generators, power-grids, and double battery backups, guarantees an incessant power supply to colocation buildings that can be trusted to not fail. Finally, there is a range of flexibility regarding bandwidth that comes at no extra cost. 


Naturally, the cost is going to be the main factor in deciding whether to choose the cloud or Colocation. With a typical set-up of the cloud, the annual cost is likely to be somewhere in the region of USD 20,000. This price incorporates the upfront costs, maintenance, and managed costs so there won’t be any extra financial obligations. When opting for colocation services, it’s the business’s job to purchase all the server hardware which can be expensive. However, the average annual cost is usually around USD 3000 which makes for a much cheaper alternative to the cloud. 

Which is the Best for Your Business?

Choosing between colocation and cloud computing depends hugely on a number of factors including the size of the business and the business’s capacity for outgoings.  Additionally, the business needs to outline the requirements of its operations and look at the effectiveness of opting for solutions from both servers. Do they need the physical space, bandwidth, and the incessant power of colocation or the speed and efficacy of the internet-based cloud? 

“Typically, smaller and start-up businesses choose the cloud for their data outsourcing and technological services while larger operations, with their more advanced resources, opt for colocation due to the option of total control over their servers,” says Jenna Smith, a tech blogger at and

As every business is unique, so are their data and technological requirements which is why businesses should employ IT consultants and advisors to create the best combination of server solutions for them.

About The Author

Michael Dehoyos is a content marketer and editor at Ph.D. Kingdom and Academic brits. He assists companies in their marketing strategy concepts and contributes to numerous sites and publications, as well as writing for Assignment Help.