Your Guide to Software Selection

Colocation vs Cloud Hosting: What’s the Difference?

As the demand for powerful data infrastructure management continues to expand, businesses increasingly rely on outsourced data management solutions, and for good reason. Contracting with outside data management providers confers several benefits, including technical support, ease of use and administration and managed security, all of which save businesses time and money. While there are several remote computing options currently on the market, two of the most widely implemented solutions are cloud hosting and colocation.

Colocation vs Cloud Hosting

Colocation and cloud hosting each offer businesses streamlined data and network management. On the surface, they may seem very similar, since both are outsourced data management solutions that are implemented via off site hosting. However, comparing colocation vs cloud hosting, there are distinct solutions with unique capabilities and different purposes.


Colocation providers rent out physical space for servers, hardware and other equipment. Colocation costs include power, storage, climate control and bandwidth. When businesses colocate, they are outsourcing storage and maintenance of physical hardware and servers while retaining ownership of the equipment. See analyst report of top colocation services for 2015.

Cloud Hosting

Cloud hosting providers administer off site, cloud-based software, storage and infrastructure. Providers own the equipment and they manage system security, maintenance and upgrades. The provider hosts and delivers the system and equipment as a service.

Both colocation and cloud hosting offer convenient, outsourced data infrastructure solutions designed to take strain off businesses. Choosing properly, however, depends on what is straining your business.

What cloud hosting requirements are most important to your organization? Get help from our post on top cloud hosting requirements.

Why Colocation?

If you are pleased with your current hardware, colocation may be the best option for your business. Colocation is especially valuable for organizations that have invested heavily in physical equipment, or for those that simply lack the space and power required to maintain the hardware at their own facility. Additionally, some businesses use colocation as a backup system, or implement colocation as a way to preserve staff time and company resources.

If colocation is the right option for your organization, consider choosing a colocation provider that offers scalability – one that will, in other words, allow you to pay for what you need, and nothing more. Also ensure that the colocation provider’s quote encompasses all aspects of storage, including space, maintenance, power and cooling.

Ultimately, colocation is an excellent option for businesses that wish to outsource data management while retaining control of their hardware. For more information, see our ratings report on leading colocation data center providers.

Why Cloud Hosting?

Cloud hosting providers supply and manage the full hardware and software infrastructure. Servers, software and network are delivered to businesses as a service. Cloud hosting is an excellent option for businesses that don’t have an existing data management infrastructure, or simply don’t want to maintain or invest in one. Businesses should also consider cloud hosting if they intend to replace existing infrastructure easily and efficiently.

Before choosing a cloud hosting platform, make sure the provider maintains applicable industry compliance and offers strong physical and digital security.

Choosing Between the Two

Colocation vs cloud hosting? Each offer distinct benefits, advantages and functionalities, although the solutions were designed to meet different needs. Your organization’s data management and infrastructure needs ultimately determine which solution is more appropriate for your business.

For more in-depth information and evaluations of both colocation and cloud hosting providers, check out SelectHub’s library of cloud hosting selection templates. The templates provide top service features for all types of cloud services, including hybrid cloud, storage services, network and data security, managed services, and more.

SelectHubColocation vs Cloud Hosting: What’s the Difference?

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