3rd annual cloud computing world forum: 21st - 22nd June 2011, Olympia, London a selection of papers from exhibitors at the show.

Author:Stevens, Jason
Position:Company overview

Has The Cloud Killed Colocation?

Colocation and cloud computing are in many ways synergistic saviors for an IT department wishing to attain economies of scale, increased agility, a reduction in complexity and additional cost savings.

While virtual dedicated servers are without doubt the future direction of the industry, colocation still occupies an important place at the table for a hands-on IT team.

Both collocation and cloud computing reflects an ongoing theme that began in the 1990s with the birth of the Internet: The continued outsourcing of complex IT operations to more sophisticated 3rd party service providers.

This trend has accelerated in the 21st century with most of the attention focused on the tremendous advancements in virtualized technology offered through cloud packages such as VMware and Xen Sandbox enterprise servers (both offered by Virtual Internet).

However, it would be mistake to surmise that colocation has no role to play as the march towards virtualization continues (projected to account for 80% of all computing provisioned through the Internet by the year 2020).1

In fact, a recent survey of IT departments revealed that only 51% of respondents use virtualization within their in-house IT infrastructure, and only 32 percent use it in colocated servers. As many as 57 percent of respondents, said they did not believe that virtualization would significantly reduce their data center footprint.2

Another study indicates that 83% of respondents are planning data center expansions through 2011. Increasingly, IT organizations are looking to third party suppliers with flexible financing strategies as a means to supplement their own aging datacenters.3

To fully understand the advantages of colocation in relation to cloud computing it's essential to examine the full range of hosting options available to an IT department (including virtual dedicated servers offered by Virtual lnternet).4

Shared hosting

In this configuration, the company website is one of many on a single server sharing a common pool of resources. Cheaper costs come at the expense of security and stability.

Traditional Virtual Private Server (VPS)

This basic virtualized environment divides a single server into multiple servers without directly impacting the hardware. Users typically do not have root access. It's more flexible and secure than a shared package but growth is restricted since resources are limited.

Dedicated server

In this scenario, the company has almost complete control over the hardware, including ownership. The user engages the server through remote FTP access, VPN and/or RDP. All resources are dedicated but entry costs are higher and redundancy requires extra investment.

Traditional Colocation

Colocation allows a business to outsource only the support infrastructure of a data center -- heating, cooling, site security, connectivity, and so fourth, while maintaining company-owned servers. This offshoring of technology to a provider reduces both cost and complexity.

Managed Colocation

A variation of traditional colocation is something called managed colocation, which removes the burden of managing the infrastructure. The user remotely manages and administers the environment, including the networking devices, monitoring tools, and the operating system, giving some measure of control. Managed Colocation typically offers greater value than traditional colocation or on-premise solutions.

Cloud computing and Virtual Dedicated Servers (VPS)

Cloud hosting is a style of computing where scalable and elastic IT-related capabilities are provided as a service to customers using Internet technologies.5

The cloud model offers the entry-level pricing of shared hosting, the flexibility of VPS and the resource guarantees of a dedicated server or colocation model.

The company only pays for resources he needs and can scale up or down without the limitations of a VPS. The cloud is also self-healing; if there is a hardware failure the virtual dedicated server starts up elsewhere in the virtualized environment within seconds.

Similar goals; different paths

After assessing the above it is clear that cloud hosting is a natural evolution of both VPS and colocation. However, the colocation model remains extremely compelling to organizations adopting a wait-and-see attitude to the cloud.

Although colocation and cloud computing are similar in that they involve slightly different degrees of outsourcing, going from colocation to the cloud is a big step for some enterprises.

Given the security and compliance challenges associated with cloud computing, means some decision-makers remain reluctant to outsource storage of their sensitive and critical data to the evolving capabilities of the private and public cloud.6

In these instances, it is usually preferable to maintain ownership and tight control of the hardware and related equipment found under either the traditional or managed colocation model.

If the enterprise or business has a sophisticated IT department and unusually complex critical business applications it may (in some instances) gain comparable economies of scale via the colocation model than by consuming cloud services.7

Some studies comparing tightly controlled colocation configurations to cloud models suggest that colocation may over a short period of time be cheaper than the cloud. However, this generally requires an experienced and forward thinking IT team to ensure the server is fully utilized at all times.

Further, over longer periods, it would still make sense for the organization to provision some of the business applications in the cloud. This diversified approach mitigates risk and allows an organization to slowly take advantage of improved security and compliance models as cloud computing matures.8

A natural match

In many ways, cloud computing and colocation are a natural match. Cloud resources are accessed via the Internet, making reliability a key requirement.


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