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Private Data Centers vs. Colocation Facilities and Cloud Computing

on-premise data centers vs colocation
Michael Isberto

The question of where you or your company should store is an important one to think about and important to answer. There are a couple of different options one can take and know which one is best for your business will be beneficial.

The more a business grows and expands, it will have to decide on a few things. Should they keep their servers on-premises, move them over to a cloud, or use a colocation service? This decision will be determined on different factors which we will discuss, but it will also determine the long-term future of the company. Let’s get into it.

The first option is an obvious one—keep your own In-House data center for your own team to handle. This refers to having all servers and networking hardware owned, controlled and operated by your own team. This could mean on-premises or at your own stand-alone data center location.

The next option is to migrate your data to a colocation service or a cloud. There are many reasons and benefits to migrating your data.

data center migration

Photo Source: gigabitmagazine

Why Should Your Business Migrate to a Colocation Service or Cloud?

As your business grows, the strategic decision of whether to continue to operate your data center on-premises or to collocate will be in question. There are many reasons why you should migrate your data center on-premises into a Colocation Facility or a Cloud. Let’s break down some of the reasons why.

The first important decision factor for most businesses is costs. Planning for costs correctly will determine your profit margin. Having your own private data center facility can seem like an attractive venture, especially for businesses who want to keep their information close. Having your own on-premise data center facility can also give a company more control over how they want to deal with security protocols. But the costs of running your own private facility can be impractical if your data storage needs are simple.

Some of the costs that you will have to deal factor in will be construction, power, cooling, equipment, building permits, staffing, and physical security and security technology. For many businesses, this model of having an on-premise data center just doesn’t make any sense financially. Which Is why going with colocation, cloud, or hybrid cloud environment can make more sense financially. Paying one of these other options will be more affordable without having to deal with the stress of having to manage your own data center operation.

data center security

Photo Source: techrepublic

Data Center Requirements—Security and Compliance

Having your own private facility also requires having a skilled staff available 24/7. Managing a data center is time-consuming and can also be complicated. Having good staff on-hand can be expensive. Using a colocation or cloud provider can give you the range of requirements your business needs without the need to pay for the ones you don’t. Having a provider manage and monitor your IT assets can be beneficial for your company.

Security is one of the most important parts of a data center operation. Depending on the industry you are in, different compliance requirements will need to be taken care of for the company to properly run their own facility. Some of the things a company will need to think about are surveillance cameras, multi-factor authentication, biometric scanning, and entry and exit monitoring. Older legacy systems have many vulnerabilities and can cause your data to be susceptible to attack.

A cloud or colocation provider can help with your security needs and at the same time keeping your system up to date with the best security technology available. Some data center providers offer better security—so make sure you know what is included in your service package.

We briefly discussed compliance, but we will dive into it a litter deeper. Most organizations will most likely need to follow some sort of compliance regulations. This could be HIPAA, FedRAMP, PCI, etc. Compliance can be difficult to follow for on-premise data centers if they don’t have the properly skilled professionals to do so. And the consequences of noncompliance can be very costly for a business. The health insurance company, Anthem, paid the biggest HIPAA settlement in history at $16 million.

Many data center providers will help with compliance and can also provide consulting services to ensure your company is following all compliance regulations. Data centers are also required to keep compliance regulations such as SSAE18.

Data Center Efficiency

Photo Source: sustainableevolution

Data Center Providers Can Offer Reliability and Efficiency

Reliability is another benefit of using a data center provider. Downtime and disasters can be very costly for a business. This could be caused by an earthquake, hurricane, or another natural disaster, or it simply caused by a technician accidentally unplugging a cable. Disruptions can be tremendously costly for businesses. Depending on the industry you are in can determine how important reliability is to your company. While this may be true to some, we believe that every business should think of reliability as a necessity. Using a qualified provider decreases the concern about these matters. The best data center providers will deliver dependable and redundant environments, consistent power, at a location aimed to reduce natural disasters.

Power usage and energy efficiency also play an important role in costs. Cooling systems for your servers can be very complicated. Making sure your servers are running at the correct temperature is important. Modern HVAC systems and even more so liquid cooling systems are complex and difficult to manage without the right skills. And the better your system is, the more money you will spend on equipment and more knowledge and skills you need to manage it. The best cooling systems are already a part of the package when you use a colocation and cloud provider. They also use the best technology, which only means high-efficiency and less cost out of your pocket.

cloud and colocation

Photo Source: networkworld


Migrating your data to a colocation service or a cloud is a big decision. There are benefits to both an on-premise data center and benefits to migrating your data into a colocation or cloud facility and having someone else help manage the load for you. If you do decide to migrate your data here are some things you should keep in mind. Colocation Services are more likely to offer enhanced connectivity, incessant power supply, and the flexibility of bandwidth. While Cloud Computing can offer enhanced speed, software integration, and the flexibility of storage. Both are great choices for businesses that don’t want the hassle of managing their own data center. Contact a data center provider today for help figuring out what plan is right for your business.


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