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Co-location vs Private Cloud: Definition and Differences

With many businesses under pressure to drive digital transformation, IT leaders are looking to implement cloud and data centre colocation solutions to increase the efficiency of their current infrastructure whilst also delivering a high level of service. Looking at the offerings of colocation versus cloud, they are not mutually exclusive options, with many businesses using both in a hybrid solution that best suits their needs. A mix of colocation and cloud can be very beneficial for balancing requirements including security, flexible compute resource levels and legacy applications.

What is Private Cloud Computing?

Cloud computing is a service, usually provided by a cloud platform provider that includes its own set of tools and technologies. These are based on remote servers that can be accessed self-service over the internet. The cloud platform provider manages the storage, servers and networks required, businesses simply pay to use these services as and when they need them.

Then what is a private cloud? A private cloud is a subset of cloud computing that is dedicated to a single organisation. It provides resources and services similar to public clouds but on a private network. Private clouds can be deployed on-premises (within an organisation's data centre) or hosted by a third-party provider.

What is Co-location?

Colocation is a strategic move in the age of digital transformation, allowing businesses to rent space for IT infrastructure in a data centre. Colocation is the way forward for businesses as it provides the physical location, cooling, power and security, so that you can move to a future-proof agile IT infrastructure and expand your global footprint. Colocation services also include the possibility of multiple and hybrid cloud infrastructure, with direct access to providers such as as Google, Amazon Web Services, and Microsoft Azure.

Advantages of Private Cloud

Cloud computing has a lower entry cost for businesses looking to expand their IT resources beyond servers in their own office. The self-service model allows for flexibility to scale up or down compute resources used depending on the business needs. The accessibility of cloud is another key factor in the growth of cloud hosting, with 94% of enterprises already using a cloud service.

Private cloud provides enhanced security and data privacy as the infrastructure is solely dedicated to a single organization. This ensures that sensitive information stays protected and reduces the risk of data breaches. Secondly, private cloud gives organisations more control over their data and resources, allowing them to customise and tailor their cloud environment to meet specific requirements. Additionally, private cloud offers higher levels of reliability and performance, as resources are not shared with other organizations, resulting in improved speed and efficiency.

Disadvantages of Private Cloud

The use of public cloud services has its downsides for businesses. The volume of data can grow quickly into cloud, which can balloon costs and surface potential security and compliance issues with sensitive data. To scale effectively, businesses should not solely rely on cloud storage, as it can be an expensive alternative to hybrid infrastructure that includes both colocation and cloud. Overuse of cloud resources by different teams in a business can lead to sprawling shadow IT which can be difficult to manage and consolidate efficiently when looking to scale digital transformation.

One disadvantage of private cloud is the high initial setup cost. Building a private cloud infrastructure requires substantial investment in hardware, software, and skilled IT professionals. This can be a barrier for smaller organisations with limited resources. Another disadvantage is the need for ongoing maintenance and support. Private clouds demand regular updates and security patches, which require a dedicated IT team. Scaling up or down can be more complicated and time-consuming in a private cloud environment. Lastly, private clouds may lack the extensive network and global reach that public clouds provide, limiting access and collaboration capabilities.

Advantages of Co-location

Colocation is an ideal solution for businesses that require a mix of hybrid and multi cloud storage, as well as servers that store data locally for compliance reasons. Businesses that have outgrown on-premise equipment in their offices, often don’t have the capex to build their own data centre, which is why colocation works so well. Digital Realty London colocation benefits include having access to a data centre that is in the heart of London, close to offices in the City. Digital Realty’s London purpose-built data centres have robust security measures and dense connectivity to over 70 carriers. With Digital Realty’s Cross Connect services, you can connect financial markets, other businesses, partners, and customers all within the data centre for low latency data transfer, FS trading platforms, cloud service provider connectivity

Disadvantages of Co-location

Colocation requires businesses to provide their own servers and storage within the colocation facility which could cost more than using public cloud services, but it results in a much more secure infrastructure. Businesses have complete ownership and control over their equipment in colocation - but they need to consider the location of colocation very carefully. If engineers need to do routine maintenance on servers, a colocation centre situated far away from your head of operations could be a problem, costing time and money.

Colocation vs. Private Cloud - differences between Co-location and Private Cloud

Colocation and private cloud are not mutually exclusive for businesses. Many companies use both or a combination of one with other IT infrastructure solutions. The main difference between cloud and colocation is how data is managed and stored. In private cloud, servers are owned by the cloud provider and data is managed virtually. In colocation, servers are not owned by the colocation facility, but instead by the business that is leasing the space. Colocation is more focused on physical infrastructure, while a private cloud includes virtualised resources and services.

Colocation vs. Private Cloud - similarities between Co-location and Private Cloud

Colocation and private cloud both offer cost savings to businesses (compared to owned on-premise data centres) with cloud providers offering shared public resources virtually. Colocation is shared space within a data centre, but the resources within racks and cages are not shared, they are dedicated to the business that owns them. Shared resources in a colocation facility include:

  • Cooling systems and redundancies
  • Power systems and redundancies
  • Security systems

Which is best for you, Co-location or Private Cloud?

Colocation and private cloud both offer businesses different ways to store and manage their data. Private cloud, while popular, has drawbacks that mean businesses are looking for alternative ways to include secure cloud in their hybrid IT infrastructure. With colocation, business owned servers can house data securely and locally, as well as benefit from direct connection routes to cloud providers such as Google, Amazon Web Services and Microsoft Azure with Digital Realty Cloud Connect. If convenience is your main priority, having a colocation data centre in the heart of the City is an ideal option for London businesses. With the proximity to your offices, your business can benefit from hands on, local connectivity to trade markets and suppliers with our connected community of clients that already colocate with us. With Digital Realty, you can have the best of both cloud and colocation with our secure, purpose-built data centres in London, with the capacity for direct and hybrid connections to major cloud providers.

Get in touch with us to find out more!

Frequently Asked Questions

What is private cloud computing with example?

Private cloud computing refers to a cloud computing infrastructure that is operated solely for a single organisation, either internally or by a third-party provider. It provides the benefits of cloud computing such as scalability and flexibility while maintaining the security and control of dedicated resources.

For example, a company might set up a private cloud within its own data centre, where it can deploy virtual machines, storage, and networking resources for its employees to use.

Why use a private cloud?

The use of a private cloud allows organisations to have more control over their data and applications, as well as meet specific security and compliance requirements. It can be particularly useful for industries such as finance (please add the link), healthcare (please add the link), and government (please add the link), where data privacy and control are critical.

Where is private cloud used?

Private clouds are used in various industries and scenarios where organisations require enhanced security, compliance, and control over their data and applications. They are commonly found in sectors such as finance, healthcare, government, and large enterprises.

What are the 2 types of private cloud?

There are two types of private clouds: on-premises private cloud and hosted private cloud.

  1. On-premises private cloud: In this type, the organisation builds and manages its private cloud infrastructure within its own data centre. It provides complete control, customisation, and security but requires significant capital expenditure and ongoing maintenance.
  2. Hosted private cloud: In this type, a third-party provider hosts and manages the private cloud infrastructure in their data centre. The organisation can still enjoy the benefits of a private cloud without the need for building and maintaining the infrastructure.

What is the difference between a cloud and a private cloud?

The main difference between a cloud and a private cloud lies in the ownership and accessibility. A cloud generally refers to a network of remote servers hosted on the internet, which can be accessed by multiple organisations or individuals. A private cloud, on the other hand, is dedicated to a single organisation and can be hosted either on-premises or by a third-party provider.

Is data centre a private cloud?

A data centre is a facility that houses computing systems and infrastructure, including servers, storage, networking equipment, and power and cooling systems. While a private cloud can be hosted within a data centre, not all data centres act as private clouds. A private cloud refers to the virtualised infrastructure and services on top of the physical data centre infrastructure.

A data centre may house a combination of various infrastructure types, including private clouds, public clouds, colocation facilities, and traditional IT infrastructure.

What is the difference between a private cloud and a data centre?

Cloud and data centre are not the same. A cloud refers to a network of remote servers hosted on the internet that provides various services and resources, such as computing power, storage, and applications, accessed over the internet. A data centre, on the other hand, is a physical facility that houses computing systems and infrastructure, including servers, storage, and networking equipment.

Does private cloud require a data centre?

No, private cloud does not necessarily require a data centre. It can be built and hosted on-premises within an organisation's own infrastructure. However, some organisations choose to utilise data centres to host their private clouds for better infrastructure reliability and operational efficiency.

What is the meaning of colocation services?

Colocation services refer to the practice of housing privately-owned servers and networking equipment in a third-party data centre facility. Rather than hosting servers in-house, businesses can rent space, power, cooling, and network bandwidth from a colocation data centre. This allows companies to benefit from the data centre's infrastructure, including security, redundancy, and connectivity, without having to build and maintain their facility.

*This content was originally published by Interxion: A Digital Realty Company.