Cyxtera Blog: Data Centers

Written by Chip Freund on July 30, 2018

The Difference Between On-Demand Colocation and Cloud

Cloud offers many benefits, but not everyone can get there. Read about the difference between on-demand colocation and cloud so you can start realizing the benefits.


Cloud computing including all the XaaSs - infrastructure, platform, and software — will be a $186.4 billion market according to Gartner predictions, a 21 percent jump compared to 2017. While that growth is massive, the data center colocation market is expected to grow as well. Markets and Markets predicts it will double from $31.52 billion in 2017 to $62.30 billion by 2022.

Data center colocation is growing, driven by a need to expand capacity while maintaining control, improving reliability, and assuring IT infrastructure is secure. The data center colocation market is expected to grow rapidly because of the increasing number of enterprises moving workloads out of legacy in-house facilities and into cloud and colocation environments.

The challenge with colocation is of course planning, procuring and deploying new IT infrastructure. It can be a time-consuming process taking up to three to six months to deploy a single application, from provisioning circuits to building out infrastructure in a colocation cage, to installation and configuration of the hypervisor, and finally the loading and testing of the application.  

Traditional IT infrastructure builds in colocation require organizations to design and provision capacity for peak loads on day one. Quickly scaling up and down isn’t possible. If there isn’t enough storage capacity, IT needs to buy additional disks and storage controllers. If the workload is memory or processor bound, additional servers or blades are required. These periodic large capital outlays and large step function expansion is a CapEx heavy model that contributes to high operating costs.  

Difference between cloud and on-demand colocation  

Public cloud services clearly overcome some of these colocation limitations by delivering significant benefits from an OPEX consumption model, flexibility to meet business demands, instant infrastructure provisioning and extra capacity – amongst many others. There is no need for onsite data center staff and often there are no long term contracts. But there are issues here as well.  

One of the main concerns is the risk associated with and lack of control of shared multi-tenant IT infrastructure. Despite its obvious benefits, public cloud’s shared infrastructure remains a point of contention for many due to fears about host data breaches, outages or service degradation that are out of their control. Additionally, some applications just are not ready or architected properly for the cloud.  

Costs come into play too. While cloud can be cost-effective in the beginning, cloud bursting capabilities come at a premium. So if you’re simply running a steady-state workload in the cloud, the financial benefits aren’t nearly as compelling.  

On-demand colocation helps avoid the risks and loss of control associated with public cloud platforms. On-demand colocation is the ability to point, click and provision compute, storage, and network resources on-demand within a colocation data center. Based on a software-powered data center architecture, on-demand colocation offers a broad range of colocation and connectivity services in minutes. It’s the answer for any organization that wants to take advantage of on-demand deployment and consumption, speed time to market and run “headless” data center operations – but still retain control over their infrastructure.  

Leveraging a software-powered architecture, the time it takes to deploy dedicated IT environments can be shortened dramatically – from three to six months down to a matter of days. This includes everything from hardware design and procurement, colocation space selection and build out, network provisioning, hyperconverged infrastructure and hypervisor installation.  

All colocation costs are OpEX instead of CapEx helping organizations eliminate the complexities of procurement, logistics, and capital equipment management. Organizations can take advantage of on-demand deployment and consumption, speed time to market and run “headless” datacenter operations but avoid the risks and loss of control associated with public cloud platforms. Finally, on-demand colocation eliminates the need for organizations to over-purchase capacity for peak-loads so you don’t have to pay for expensive unused infrastructure.  

As decisions are made as to which of your applications belong in the public cloud and which are best operated out of the data center, you shouldn’t have to compromise agility, flexibility or control of your infrastructure.  

Learn more about how Cyxtera delivers on-demand colocation.