Articles label

Colocation vs Cloud Hosting

Last Updated: February 9th, 2023 4 min read Severs Australia

Cloud image

The model of on-premise servers is quickly falling out of favour. Today, more and more businesses are moving the servers that power their business off-site either through Colocation or cloud hosting. But what are the differences between these two models, and which one is right for your business?

What is Cloud Hosting?

Cloud hosting removes the need for you to own and maintain your own servers altogether, allowing you to store and manage your data on the cloud rather than storing it in a physical server. While data stored on the cloud is still stored in servers, these servers are owned and maintained by a third-party cloud hosting provider.

You never have to access them, worry about their security or maintenance, or otherwise concern yourself with their existence – all of these responsibilities fall to your cloud hosting provider, leaving you free to focus on other aspects of your business while being able to access your data from any internet-connected computer so long as you have the right credentials.

Thanks to a concept known as the economy of scale, cloud hosting providers are also able to provide these services for a much more affordable price than what you yourself would have to spend if you wanted to build a comparable infrastructure from the ground up.

What is Colocation?

Colocation closely resembles on-premise data storage, requiring the acquisition, upkeep, and supervision of your hardware. Instead of housing servers at your office, colocation enables you to lease space at a Data Centre for server storage.

Advantages of opting for a Data Centre over an office setting.

  • Optimal conditions for an office are not conducive to efficient server storage, as servers require cool temperatures to maintain energy efficiency.

  • Data Centres typically implement multiple safeguards against power outages, ensuring your servers remain operational even during power disruptions—an essential consideration for disaster recovery.

  • Allows you to capitalise on economies of scale, akin to the benefits of cloud hosting. By sharing security, energy, and other expenses with other organisations storing their servers at the Data Centre, Colocation provides access to superior services at a fraction of the cost required to locally power, secure, and store your servers.

Colocation vs Cloud Hosting

With both Colocation and Cloud Hosting, you are able to affordably store your data on servers that are kept at a more ideal location than you would otherwise have access to.

The key difference between colocation and cloud hosting is that with cloud hosting the responsibility for purchasing and maintaining the servers that store your data falls to the cloud hosting or cloud storage provider rather than your business. This means that cloud hosting could save you a lot of money by negating the need for you to purchase your own servers and negating the need for you to have employees in place who are able to keep those servers secured and maintained.

Cloud hosting also makes it much easier for you to scale your infrastructure. Since your cloud hosting provider will already have all of the necessary hardware in place for you to scale your infrastructure up or down as you please, scaling your infrastructure as your business grows or otherwise changes can be done at a moment’s notice when you make use of cloud hosting.

However, colocation offers a few considerable benefits as well. For one, if you already own all of the necessary hardware and already have the employees in place to maintain it, colocation might end up being the more affordable of the two options.

Colocation also gives you a much greater degree of control over the servers that store your data and allows you to retain complete ownership of your infrastructure.

Lastly, If you aren’t ready to fully migrate to the cloud, colocation can be a beneficial first step that allows you to enjoy many of the same advantages that cloud hosting offers without completely overhauling your existing model.


Both colocation and cloud hosting offer a number of unique advantages, and the debate over colocation vs cloud hosting ultimately comes down to the individual requirements of your business.

Given the key differences between colocation and cloud hosting, though, chances are that one is going to provide a better solution than the other depending on what you are looking to achieve, so be sure to take the time to carefully compare and contrast both options.

However, regardless of whether you choose colocation or cloud hosting you’ll almost certainly be able to enjoy more benefits than you would if you stored your servers on-premise.