Data management is essential in performing business transactions for most companies. That is why the demand for data management service providers keeps on expanding and the need to build more data centers keeps on increasing. To satisfy these needs and demands, IT companies came up with new solutions and purposes for their data centers—cloud hosting and colocation.

Colocation or “colo” is the renting of space at a data center facility by a client to house and operate their company’s servers and storage hardware. This means that a colo is a place that leases space and may or may not provides administrative services to operate their clients’ servers and IT system.
Cloud hosting, on the other hand, is a system of software in an outsourced data infrastructure that provides off-site administration and data storage for their clients. Therefore, the Cloud refers to a system, not a place or location. Cloud service providers either own data centers or colocate data center facilities to operate their services.

Cloud hosting and colocation are two different services, but both offer data management solutions to their clients. However, for companies that prioritize data security, colocation is considered a better option for its advantages over cloud hosting:

Dedicated server – Since you own the servers, you know that your company is the only one using them. This makes it easy for you to readily thwart off problems or issues associated with shared or public servers.
Data security – Having dedicated servers and equipment ensure that no other users can transmit data to and from them that may contain malware or viruses that could damage your IT system.
Long-term economy – Choosing to collocate may cost you twice or more than cloud hosting in the first year. But that’s only because you have to purchase your own server and equipment. However, in the succeeding years, you’ll find that you’ll be spending much less than you would with cloud hosting.
Server access – The best thing about colors is that you can personally check on your servers and equipment to make sure your system is intact and in great working order. This is something you can’t-do with cloud hosting because you don’t have the authority to physically access the servers.
Transfer and relocation options – When your company owns the servers, you can choose to transfer or relocate them to another color or house them in your company’s own data center after your first colo contract expires. Cloud hosting, on the other hand, does not allow you to choose the location of the server they will host your websites and IT system on.
Manpower selection – In colocation, you have the option to provide the manpower for your server and data management. You get to personally choose and hire the IT’s, data managers and technicians, and actually, know their names and faces. In cloud hosting, you won’t have any idea who’s actually handling your account or fixing server issues, so you don’t have the power to influence their working conduct.

Though both can offer unique and convenient features, many companies, especially larger businesses, still opt to colocate their servers rather than host their network on the Cloud. This is because colors are more practical for companies that handle and store a massive amount of data in their operation.