Colocation vs. Virtual Colocation

Virtual Colocation Servers

As the data needs of companies grow, they should evaluate moving from on-premises computing to off-site data processing for fast, secure access and business continuity. As cloud-based technologies grow and become more reliable, newer options have emerged.

Rather than housing their own IT infrastructure, companies and individuals have the option of choosing traditional colocation services with dedicated servers that house their data at a third-party data center virtual colocation, which involves the storage and compute on a cloud-based system at a remote data center; or a hybrid option using both. All choices come with a set of pros and cons for prospective clients to weigh.

Key considerations are CapEx vs. OpEx and total cost of ownership (TCO). Which is best for you? Well, like a lot of things, the answer is – it depends! Most importantly, it depends on your business needs. Many customers have compliance requirements or unique business propositions and applications that are better served by traditional colocation. Some content providers need to be in carrier-neutral data centers with access to lots of networks for best performance. Other businesses can meet their business needs with less upfront cost and greater scalability through virtual colocation.

In any event, both are provided through data centers that provide improved uptime and business continuity through redundant cooling systems, redundant UPSs, SLAs, back-up generators and security.


Traditional Colocation Pros & Cons Include Operating Costs, Hardware Costs, & More

Our cabinets and equipment at our data center in Orlando, FL.

In the case of traditional colocation, a client rents physical space to store their purchased or leased servers and data. Data centers will typically offer cabinet space to house a dedicated server or group of servers that only the client (and admins) can access.

Depending on your time horizon and applications, traditional colocation can equal or be better in cost than virtual colocation. There is much more control to put the exact equipment in place, customize software and applications, and meet compliance requirements. Due to spreading the cost of generators, UPSs, cooling, and other infrastructure, traditional colocation can be much less costly than custom on-premise infrastructure.

However, when comparing as against virtual colocation, upfront hardware costs are notable. The amount of storage and compute is finite and is limited by the size of the machines or devices in use. If there is a need to grow quickly or usage of computing resources is highly variable, managing hardware requirements can be difficult. There is also the requirement to have dedicated and qualified company employees as IT staff to manage and support the equipment.

Pros of traditional colocation:

  • Cost effective when compared to on-site IT infrastructure
  • More control including for timing and type of upgrades, compliance, and security
  • Accessibility and ease of customization for unique business requirements
  • Professional tech support by on-site data center employees

Cons of traditional colocation:

  • Upfront cost of purchasing or leasing hardware and software licensing
  • Expense of dedicated IT staff to maintain and support the client’s application and equipment
  • Growth expansion can take a lot of time, planning and configuration to acquire and implement hardware
  • For upgrades, new hardware is needed

Virtual Colocation Pros & Cons Include Reduced Upfront Cost, Reduced Need for Local IT Support

Virtual colocation involves a cloud-based storage system. Your business or organization can pay to house your important data on a virtual server system with a third party. The primary difference between virtual and traditional colocation is that in the case of virtual, your data is stored at the data center on larger, shared machines.

Virtual colocation is a rather broad term and can cover many things ranging from packaged services on a cloud-based system provided by a data center provider to the larger menu of cloud-based items provided by the “industrial” cloud providers like AWS, MS Azure, or Google Cloud.

These services are typically on a monthly subscription or paid based in usage. The “industrial” cloud providers often have very complex systems and without the expertise to manage, their costs can surprise and get out of control.

Pros of virtual colocation:

  • Reduced upfront cost when compared to traditional colocation
  • No need to rent or purchase equipment or rack space
  • Routine computing tasks are typically at a lower cost
  • Can quickly scale for growth
  • Is a relatively fast and easy way to ensure business continuity

Cons of virtual colocation:

  • Costs can vary depending upon usage
  • Upgrades can lead to an increase in monthly costs
  • Scaling up or down is typically done in set increments, leading to increased costs
  • Customization is often difficult as many of the services are one size fits all
  • Complexity of some providers can make it difficult to achieve anticipated cost savings
  • Potential compatibility issues

Current trends show that a hybrid option is becoming the default choice for enterprises.


Call us today for more information on which service is best for your needs.

We offer both standard colocation and virtual colocation services and can help you decide which will best meet the needs of your company or organization. Our virtual colocation services have transparent pricing and are easier to manage than “industrial” providers. Our physical site is highly secured, uses industry-leading redundant power systems, and we offer quality customer service should an issue arise. Our data center serves Orlando, Space Coast, Tampa, Daytona Beach, and is also nationwide.

Call (407) 210-2480 today to speak to an agent regarding our colocation services, or for any inquiries, please contact us.


Colo Solutions
100 W. Lucerne Circle,
Suite 201 Orlando,
FL 32801

Sales Phone
(407) 210-2480

Support Phone
(407) 210-2476

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