Managed Hosting vs. Colocation: Which One Does Your Business Need?

If you're looking to expand your IT infrastructure beyond what your existing on-premise solutions are able to cope with, turning to a hosted solution may be an attractive option. These typically offer firms more flexibility than traditional data center services, and can be simpler and less expensive upfront.

There are a range of options to select from when moving infrastructure off-premises. For most enterprises, the key decision will be between a managed hosting solution and a colocation - or colo - alternative.

While there are some similarities between the two, there are also a few key differences to be aware of, and one solution may well be more suited to an individual business' specific needs than the other. Therefore, it's vital you're aware of what these are in order to make the best decision for your firm.

The choice between managed services and colo

To start with, it's helpful to understand what the two options have in common, and why they may be useful to a business.

For starters, both involve hosting your servers in a different location from your main data center, which brings with it a number of benefits. Firstly, there's the added resilience this can offer, as it ensures that even if your main location is subject to disruption such as power outages or natural disasters, your critical IT systems will be unaffected. It also reduces the overhead costs associated with managing a large data center, such as power and cooling demands.

Both managed hosting and colocation also use dedicated servers for your business. This means you won't have to share resources with other organizations, offering you greater control and security for your systems.

Finally, managed hosting and colo also both provide a highly scalable solution, allowing you to quickly add additional server space as your business grows. This enables you to respond better to changing circumstances, and ensure you don't get left behind by more responsive competitors.

The benefits and drawbacks of a managed hosting solution

But what about the differences? For managed hosting services, the key feature of this solution is that you are leasing servers from a provider. This means that your hosting partner takes on significant responsibility for areas such as setup, security, admin, patching and ongoing monitoring and reporting.

This offers more convenience for businesses as your own IT staff don't have to worry about maintaining the servers - this is all part of the contract. As a result, it's well-suited to firms that are under-resourced or lack the technical skills to manage their servers in-house. Because you don't have to purchase the hardware outright, this also promises lower capital expenditure compared with colocation.

On the other hand, this convenience does mean you'll have to surrender some control over your servers. Not all managed hosting providers are the same, and may have different clauses in their service level agreements concerning issues such as admin rights. It may also take a while to get up and running, as you'll have to ensure the partner is familiar with your infrastructure and that your team understands who is responsible for what.

Pros and cons of colocation

By contrast, the major difference for colocation services is that in these arrangements, you actually own the physical server hardware itself. In this case, what you are actually paying a provider for is space in a dedicated data center and all the associated costs and requirements that come with it, such as the bandwidth and power needed to run your servers.

This does mean that it's likely to cost more upfront as you'll have to allocate capital expenditure to hardware purchases, as well as consider maintenance and issues such as patches, which you're also responsible for. As such, you'll also need to take into account the time and expertise your IT team will require in order to manage this.

On the other hand, colocation offers you much more flexibility than managed hosting. This allows you to take advantage of all the benefits offered by a colocation facility, such as resilience and backups, without sacrificing control. You get to choose the software and the hardware upgrades you need, when you need them.

Managed hosting vs colocation: Which is right for you?

Choosing which option is most suitable will depend on a few factors. Firstly, you should consider the resources you have available in your business - both in terms of finances and technical expertise. If money is tight or you're having difficulty finding the right people, the ongoing operational expenses and expert support of a managed hosting solution may be more suitable than the more hands-on approach offered by a colocation strategy.

Colocation, however, ensures that firms retain a measure of control, and it can give less-sizeable enterprises an IT infrastructure to compete with the largest businesses, without having to go to the expense of building a data center from scratch. As such, these services may be of greater value to firms that are looking to grow fast, but don't want to invest heavily in an all-new off-site data center.