Managed Hosting vs Colocation — Choose the right mix for your business

Article by Nitin Mishra



Before we go on to writing about choosing between managed hosting and data center colocation, let us first understand what each of these means for a business enterprise.

Though both of them promise to give your organization the much needed ability to move your in-house IT infrastructure off premises or completely doing away with it, and in the process, minimizing your data center footprint and utility usage –which is ideal for your business? The answer lies in the details and depends on your organization’s specific requirements and the workloads that you would need to run from either of these options.

Nevertheless, let us compare and analyze both Managed Hosting and Colocation as suitable options for your specific infrastructure needs and outline some use cases for both.

Managed Hosting - Minimize your data center footprint by outsourcing your IT infrastructure

Managed hosting is essentially procuring dedicated hardware from your hosting service provider on a utility-based model or as a service. Your service provider also maintains and provides support for managing the hardware in their data center. The maintenance and support in a managed hosting arrangement is an icing on the cake simply because you do not have to do it yourself. Your service provider does it on a grand scale as one of its key services and its highly unlikely that your IT deployment will present any challenge(s) that they have not faced and solved before.

Technology refresh is an added advantage of managed hosting; your organization does not have to worry about the most current technology upgrades or hardware obsolescence as your hosting provider constantly upgrades the systems and servers. With managed hosting you can be rest assured that your IT infrastructure keeps pace with your company’s growth plans and you do not have to worry about how you can scale your IT to meet those growth plans. Perhaps the biggest advantage of managed hosting is that you do not have to make huge and permanent investments in maintaining you own IT infrastructure meaning that you can convert CapExto OpEx, thus, freeing up budget for more strategic capital investments.

Your IT department can focus on business priorities and strategic tasks rather than spend time and bandwidth on troubleshooting day-to-day infrastructure related issues. With managed hosting you can reduce manpower costs, as cost of hiring and retaining skilled IT staff can be extremely high. So all in all a win-win situation, expertise coupled with competitive SLAs can help your organization focus on more strategic issues, gain cost efficiencies and divert investments where they are needed the most.  

Colocation: Minimize your data center footprint and still maintain control over your hardware

Though, outsourcing your complete IT infrastructure can give you some significant advantages but given your distinct organizational needs, you may want to own and maintain control over your IT infrastructure for certain workloads. This holds true for companies in financial services, pharma, development and testing sectors where the nature of business requires adherence to compliance and regulatory restrictions. In other cases, your company may already have invested in its own hardware and may not want to divest that.

In such cases, colocation is the ideal option; you do not have to worry on account of sunk costs. With colocation, you can move your hardware off premises to your colocation service provider’s datacenter. If your provider has a high-density data center, you can even minimize your data center footprint. The beauty of colocation is that you choose and purchase your own hardware, own it, control it and maintain it in the provider’s environment - this saves you capital costs of building your own data center.

As your business expands, you may need more space, more power, more bandwidth to maintain and run your own facility, colocation is an ideal option for reducing capital expenditure. It enables you to maintain control over your IT assets and at the same time take advantage of the breadth and depth of your colocation provider’s expertise in running and operating data centers. Though you would definitely benefit on the cost front with a fully managed hosting environment simply because your CapEx gets converted to OpEx, your organization can avail of an array of Managed IT services that your provider may offer. With Managed IT services, you can look at offloading maintenance, support and technology upgrades/refresh and even supplement your servers with managed storage solutions from your colocation service provider.

Colocation vs. Managed Hosting: Which is better?

I am sure, with the above analysis on colocation and managed hosting, you would have a fair idea about the benefits and the trade offs of both options. It is not unusual for companies to go for colocation first and then move on to managed hostingwhen their hardware needs an upgrade or refresh. However, whether you decide to go for a colocation data center or managed dedicated hosting depends on your organization’s specific needs. Today, more and more organizations are realizing that a combination is the best fit for their unique mix of workloads – the age of Hybrid IT has finally arrived.