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Colocation Services vs. Cloud Hosting – Should You Choose?

May 14, 2014

Cloud computing has a lot to offer, not the least of which are choices … many, many choices. Unlike the inflexibility of the traditional data center, the cloud lets you tailor solutions pretty much at will without being held back by unamortized investments in equipment and facilities.

While that’s true, it has become increasingly apparent that people still want to own and operate their own IT systems, and will continue to well into the future. The reasons could be financial, a matter of trust, a need to control or something else.

It’s also becoming apparent that the optimum strategy lies somewhere in the middle. The debate now is more about a proper balance, a hybrid computing strategy using a number of computing models and specific services. Colocation can be a component of this strategy and, done thoughtfully, can be the staging area for engaging cloud services.

A Solution for Every Need

Data center services providers have been around a while, long before cloud computing came to dominate the scene. For example, Peak 10 began as a data center services provider in 2000. The reasons for engaging with a colocation provider are as valid now as they were then.

The biggest reason is that people want to own and control their IT systems, but not the data center they sit in. IT can move its systems into a colocation provider’s modern facility that’s outfitted specifically for the purpose with room to grow and no loss of control. With that comes power, cooling, back-up systems, 24/7 staffing, physical security, defined availability, bandwidth and other advantages, depending on the service provider. It can also save a boatload of money.

But, what if you don’t own the hardware and software yet? Does it make more sense to buy and place your own systems in a colocation facility, or to move your workloads straight into the cloud? Arguments can be made both ways. The one correct answer is, whatever solution works best for you.

If it’s colocation, then contract with a provider that is more than a colocation pure-play. Select one that offers more services and options. That way, adapting your computing model to accommodate future growth and new opportunities can be easier when you develop trust and comfort with your provider. Some will offer managed services, cloud services and other capabilities beyond straightforward colocation.

Locating such a provider close by may be difficult, however. While not essential, it’s usually advantageous for you to be in relative close proximity to the colocation facility for easy access and troubleshooting. Hopefully, one that meets your standards and longer-term objectives is nearby.

If distance is a factor or you are staff-challenged then managed colocation may be desirable. With managed colocation, you pay for the server space and a team from your hosting company to manage your server for you. This is great for companies that want the control of colocation but don’t have an IT department to manage or easily get to the server. Unmanaged is where you handle all the administration and management of the server yourself, including software updates, the Web server, and the site itself, hence the benefit of proximity or robust remote management tools.

Peak 10 has many clients who began with colocation and later added services –data back up and disaster recovery, for example – after getting to know our people and the way we operate. We also have clients who came to us just for colocation but, after consulting with our engineering staff and familiarizing themselves with cloud technology, opted to forgo colocation for cloud services instead.  One such client, Kenneth Kloeppel, Director of IT for Transport Pro, said, “We knew our solution would ultimately reside in the cloud, but were not aware of all of the cloud features available to us with Peak 10.”

Vendor Considerations

Regardless of whether you choose colocation, cloud or a combination of the two, providers’ facilities will range in quality, professionalism and track record. At a minimum, you’ll want a facility that offers you 24/7 physical access, and that is staffed around the clock with technical support personnel to assist you if needed. Look for security features, like keycard-lock or biometric scanning to gain access to the colocation data center floor and other sensitive areas, closed circuit TV monitoring, and a controlled check-in / check-out process for all visitors, requiring positive identification. The facility’s power must be fully conditioned and backed up by UPS and a continuous source generator. Finally, must have efficient environmental controls that keep the data center at a constant temperature.

It may be important to you and the data you process to be with a provider that can demonstrate that it operates and maintains its facilities in a manner that ensures compliance with various data privacy laws and industry regulations. Many do not and some that say they do … well, ask for proof.

“Many prospective customers come to us thinking that all data centers are pretty much the same … seen one you’ve seen them all,” said Paul Earles, Peak 10 sales engineer. “When we ask if they have compliance requirements the conversation changes, especially among healthcare professionals. We offer to sign a Business Associates Agreement (BAA) as required by HIPAA and that really gets their attention. Many people just assume that regulatory compliance isn’t a feature they can expect to get from an outsourced vendor.”

The Peak 10 network of strategically located, SSAE 16-audited data centers can help customers meet the requirements of regulatory compliance acts such as Sarbanes-Oxley (SOX), HIPAA/HITECH, PCI DSS and Gramm-Leach-Bliley (GLBA), as well the EU Safe Harbor Directive.

It’s a Hybrid World, or Will Be

Colocation or hosted cloud? The answer is yes and has everything to do with creating the right solution for now and laying the groundwork for where you plan to take your business in the future. The options will only continue to multiply and improve. Position yourself to be flexible in order to take advantage of things yet to come. Avoid getting yourself locked down to a situation that limits your possibilities. Ally with a service provider you can stay with, and one that will help every step along the way.

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About Peak 10

"Our values are the foundation for everything we do at Peak 10, and are ultimately what enable us to earn our customers' business and their trust."
David H. Jones,
Board Member, Peak 10 + ViaWest