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Cloud Computing vs Colocation in Data Centers

Cloud Versus Colocation – Companies are being bombarded with hype about Cloud Computing. Large, incumbent vendors are re-branding their legacy technology as Cloud, while the media labels every technology under the sun “Cloud” in order to drive readership. It’s no wonder that the picture around cloud is murky at best. This not only creates confusion, it forestalls companies from making rational, timely decisions about if and when to use cloud computing.

Cloud computing may look cheap, but it isn’t the cheapest option for everyone. Forbes published an article with lots of hard market data on actual cloud and non cloud alternatives, written by Gene Marks, who advises clients on their IT purchases. He helped 30 small businesses evaluate cloud computing solutions. All of these turned down cloud computing on the basis of cost.

Cloud Versus ColocationWhy is cloud computing seemingly taking off? Looking at the specific examples that Mr. Marks cites, what distinguishes these businesses from cloud adopters is that they are pretty stable over the coming 3 years, and can afford the upfront investment. This is very much in contrast with typical cloud adopters who are facing serious uncertainty about their future sizes. Buying too much might kill them financially, buying too little will lead to bad service for their clients. Additionally, they are not likely to have the capital available.

As with any solution affecting your data, you should conduct a proper assessment. Security is security, so you should have the same expectations and assessments for a cloud solution as you do for your own network and on-premise solutions. Here are a few key questions to ask when comparing costs between colocation and cloud vendors:

  • How is your data protected? (application, architecture, physical, personnel)
  • Is data encrypted at all points where it is transferred?
  • What compliance mandates, security audits, or certifications do they have?
  • How does the service provider detect a compromise or breach? How are you alerted?
  • What is their disaster recovery plan?

The Cost of Cloud versus Colocation

Why are prices of cloud computing so high?  Like any profitable company, the strategy of a cloud computing company is to grow as fast as possible while keeping prices as high as possible. When they are at their maximum growth trajectory, this invariably means that the prices will be too high for some potential customers.  (www.clubcloudcomputing.com/2012/02/when-cloud-computing-is-too-expensive)

Larger companies and companies with well-developed Information Technology departments often choose colocation or data centers to house their computer rooms. These companies value a data center’s flexibility for growth and change. Data center capital costs are enormous, and building your own no longer makes sense for many companies that need high levels of reliability. In actuality, many cloud computing vendors house their systems in existing colocation facilities.

The Telecommunications Industry Association published a standard for data center infrastructure in April 2005.  TIA 942 is the first standard specifically for data centers.  By working with a TIA 942 certified data center to colocate or host your IT infrastructure, you cut costs knowing your data is safe and available.  Working with Cloud vendors is very difficult as your data is spread across multiple data centers and storage facilities with no means of knowing if they are certified or not.  The cost in this case isn’t just higher initial payout in dollars, but potentially a loss of data, or worse, a data security breach.

The actual cost over time of cloud vs colocation for organizations requiring high levels of security such as hospitals and financial institutions is yet to be determined.  There simply are no Cloud vendors who are fully HIPAA or PCI DSS compliant that can deal with the extent of those standards on how data in the cloud is transferred or migrated.  Perhaps one day, but for now, you are better off talking with a data center consultant on how colocation can save your organization money AND maintain or exceed standards such as HIPAA, TIA 942, or PCI DSS.  (www.forbes.com/sites/quickerbettertech/2012/01/23/price-of-the-cloud-still-out-of-reach-for-small-businesses).

Detailed analysis of cloud vs leased colocation:  (www.uptimesoftware.com/uptimeblog/cloud-virtualization/cost-of-cloud-computing-expensive)

Get the best comparative information from a non-bias group, www.DataCenterAndColocation.com. It is a free service provided to clients for selecting the right data center or colocation facility for their requirements.

DataCenterAndColocation is one of the largest colocation site consulting firms in the United States. They represent approximately 3000 data centers and colocation centers. At no cost to clients, they identify specific space, location, power and security requirements, solicit proposals, professionally analyze the responses, compare the strengths and weaknesses, negotiate pricing and deliver highly competitive bids for colocation. They also perform comparative analysis for in-house vs. design build services, wholesale data center space and data connectivity.