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NEWS :: Deciding the future: Cloud/Colocation Data Center or Premise-Built Data Center?

Written by: Dr. Krishnan Ranganath, edited by Kiran Kankipati - Published: 05-Feb-2018

Before we go ahead expounding on picking between managed hosting and data center co-location, let us initially comprehend what each of these methods for a business endeavor to achieve.
Data center

According to an article written by Nitin Mishra, According to an article written by Nitin Mishra, Former Airtel & Samsung executive. “which is perfect for your business? The appropriate response lies in the points of interest and relies upon your organisation's particular prerequisites and the workloads that you would need to keep running from both of these alternatives.”

In any case, let us look at and dissect both Managed Hosting and Colocation as appropriate choices for your particular foundation needs and framework utilization cases for both.

Managed Hosting - Minimize Your Data Center Footprint By Outsourcing Your IT Infrastructure. Overseen facilitation is basically obtaining committed equipment from your facilitating specialist organization on an utility-based model or as an administration. Your specialist co-op likewise keeps up and offers help for dealing with the equipment in their data center. The upkeep and support in an Managed Hosting game plan is a what tops off an already good thing essentially in light of the fact that you don't need to do it without anyone else's help. Your specialist co-op does it on a terrific scale as one of its key administrations and its exceptionally improbable that your IT sending will display any challenge(s) that they have not confronted and fathomed some time recently.

Innovation revive is an additional favorable position of Managed Hosting; your organisation does not need to stress over the most current innovation redesigns or equipment out of date quality as your facilitating supplier continually updates the frameworks and servers. With Managed Hosting you can be rest guaranteed that your IT framework stays with pace with your's development designs and you don't need to stress over how you can scale your IT to meet those development designs. Maybe the greatest favorable position of Managed Hosting is that you don't need to influence immense and lasting interests in keeping up you to possess IT foundation implying that you can change over CapExto OpEx, along these lines, authorizing spending plan for more vital capital ventures.

Your IT office can concentrate on business needs and vital undertakings instead of invest energy and data transmission on investigating everyday framework related issues. With Managed Hosting you can diminish labor costs, as cost of procuring and holding gifted IT staff can be to a great degree high. So all things considered a win-win circumstance, mastery combined with aggressive SLAs can enable your organisation to concentrate on more vital issues, pick up cost efficiencies and redirect speculations where they are required the most.

“Do you know that you can minimize Your Data Center Footprint And Still Maintain Control Over Your Hardware”

However, outsourcing your entire IT foundation can give you some huge points of interest yet given your unmistakable authoritative needs, you might need to claim and keep up control over your IT framework for specific workloads. This remains constant for organizations in monetary administrations, pharma, advancement and testing segments where the idea of business expects adherence to consistence and administrative confinements. In different cases, your organization may as of now have put resources into its own particular equipment and might not have any desire to strip that.

In such cases, colocation is the perfect choice; you don't need to stress by virtue of sunk expenses. With colocation, you can move your equipment off premises to your colocation specialist organization's datacenter. On the off chance that your supplier has a high-thickness data center, you can even limit your data center impression. The magnificence of colocation is that you pick and buy your own particular equipment, claim it, control it and keep up it in the supplier's condition - this spares you capital expenses of building your own particular data center.

As your business extends, you may require more space, more power, more data transfer capacity to keep up and run your own office, colocation is a perfect choice for lessening capital use. It empowers you to keep up control over your IT resources and in the meantime exploit the broadness and profundity of your colocation supplier's aptitude in running and working data centers. In spite of the fact that you would profit on the cost front with a completely Managed Hosting condition just on the grounds that your CapEx gets changed over to OpEx, your organization can benefit of a variety of Managed IT benefits that your supplier may offer. With Managed IT administrations, you can take a gander at offloading upkeep, support and innovation updates/invigorate and even supplement your servers with oversaw capacity arrangements from your colocation specialist organization.

“The real Question still remains: Colocation Vs. Overseen Hosting; Which Is Better?”

I am certain, with the above evaluation and analysis carried out on colocation and Managed Hosting, you would have a reasonable thought regarding the advantages and the exchange offs of the two alternatives. It isn't bizarre for organizations to go for colocation first and afterward proceed onward to managed-hosting when their equipment needs an overhaul or revive. Be that as it may, regardless of whether you choose to go for a colocation data center or oversaw committed facilitating relies upon your organization’s particular needs. Today, an ever increasing number of organisations are understanding that a blend is the best fit for their one of a kind blend of workloads – the time of Hybrid IT has at long last arrived.

“Lets highlight some Keynotes on why collocation might be favourable to organizations willing to adapt to colocation data storage and maintenance as pinpointed below.”

PROS/CONS: Premise-Built Data Center vs. Cloud/Colocation Data Center:

Cost Model
  • Higher CAPEX, Lower OPEX
  • Requires up-front capital or financing
  • Requires on-site or sub-contracted expertise for maintenance of facility and IT assets
  • Lower OPEX, Higher CAPEX
  • Monthly operational expenses for facility leasing
  • Predictable expenditures that increase consistently over time as size of requirements increase
  • Full control over all assets, personnel, and priorities
  • Ability to leverage and share existing space
  • Limited control, may not get priority over other tenants in colocation facility
  • Public cloud solutions limit ability to deploy custom applications and software
  • If space allows, easy to add incrementally to IT or facility infrastructure
  • IT and/or facility expansion requires CAPEX
  • Typically available but depends upon growth within the colocation facility
  • No wasted capacity waiting for future use
  • Acquisition of additional racks, PDUs, power, network can take time weeks to months when needed
  • Assuming the colocation provider has space and resources available, they can expand rapidly within your rack, cage or facility
Start-up Time
  • Six to 24 months depending on size, availability, and IT deployment density
  • On demand, usually within a few weeks to months up to the operator’s size, availability, and density constraints
  • Need to train staff on facility supporting infrastructure, as well as IT, in terms of operations and emergency support
  • Can focus on IT training, but dependent on colocation facility expertise for facility training and management, as well as emergency response
  • Dependent on a combination of in-house, consultants, and vendors for certain ongoing facility-related support
  • Dependent on colocations providers capabilities such that client can focus expertise on core IT infrastructure support
  • Physical and network security implementation and management can be custom tailored using in-house or via outside vendors
  • Physical security owned by colocation provider; however, element of risk caused by other users of data center facility
  • Network security ownership depends upon public versus private cloud structure
  • • Ownership falls to data center owner for all aspects of redundancy (IT and facility)
  • Ownership only for IT redundancy
  • Facility infrastructure redundancy managed up to the limits of the operator
Network Choices
  • Depends upon vendors servicing the physical location
  • Typically more choices for network connectivity as many vendors want access to large cadre of tenants


When IT departments are looked with contracting spending plans, and requests for more noteworthy accessibility, it's an ideal opportunity to survey the organization’s server farm technique, including where it's housed and who is overseeing it.
Which One - colocation cloud or dedicated server

A good use-case scenario is that of NIRA (Nigerian Internet Registration Agency) a federal agency in-charge of the .ng domain currently set up, hosted and managed by Medallion Communications Ltd., her own particular datacenter is a wellspring of pride, it's close to home, and giving the on-premises datacenter up was no simple choice. Be that as it may, in the meantime, he perceived some inadequacies by having the datacenter on location.

When NIRA discovered Medallion Communications Ltd., they had found an organization that could meet every one of her criteria. By then, the organization banded together with them to start anticipating another site and move his datacenter to their cutting edge facility also utilized by Google. A considerable lot of the present developing organizations are currently looked with a similar choice NIRA management and decision makers needed to make for NIRA. Running with an accomplished IT organization, for example, Medallion Communications Ltd. with their cutting edge co-location data center services has a lot of favorable circumstances, which incorporates:

Genuine feelings of serenity – IT groups have significant master involvement and are continually looked with an assortment of situations. They are additionally fully informed regarding the most recent accreditations and know how quick the business advances, understanding the need to remain in front of it.

Accessibility – Co-location datacenters are not tied in with supplanting occupations. With Medallions co-location data service, NIRA and other clients currently using such services still has 24-hour access to their hardware. Outsourcing the office foundation to an outsider organization liberates assets that can be coordinated to different zones of business that need consideration, hence expanding profitability. Co-location enables organizations to benefit from faster networking and resilient connectivity at a fairly low price – delivering 100 mbps of bandwidth might be hard at an office location and trying to create a redundant solution is often financially unviable. Data centers are connected to multiple transit providers and also have large bandwidth pipes meaning that businesses often benefit from a better service for less cost.

Hazard moderation – By having the organization's datacenter isolate from home office implies one cataclysmic episode won't wipe out everything.

Diminished power costs – Power is a major cost to keep up a server farm. Datacenter administrators can arrange bring down costs that can be 40 to 60 percent not as much as general on-premises costs.

Let’s not just talk about local influences but also discuss on:

GCP Infrastructure
Photo credit:

What number of data centers does Google work? It possesses six in the U.S. what's more, three in Europe, and four more are under development (three in Asia and one in South America). (Google Nigeria) servers are currently hosted withNigeria’s own Medallion Communications Ltd. service provider in submarine cables peering point as every submarine cable coming into Nigeria have a peering point with Medallions Communications in Nigeria in as much as it may, the organization decreases to state what number of other "colocation" data centers it utilizes, sharing data center space with different outfits. Cut story short: When it does co-location, you can wager it does as such watchfully which is proof that one of the most valued tech company in the world operate and disseminate information using colocation data center technology and programming language to manage and service Google clients. The other huge point to be made is that Google is redesigning its framework. Furthermore, that is a mystery as well.

In Conclusion: While numerous organizations that think they require nearby datacenter administrations, the way that a co-location datacenter can be managed by a third-party can diminish costs, enhance benefit, offer quicker, dependable execution and development and, a large portion of all, expanded security – they may very well alter their opinion. Come to think of it, when it comes to running businesses in most sub-saharan countries in Africa electrical power supply is a major setback on productivity meaning businesses have to fall back to alternative means of electrical power supply such as Power Generators which is a huge market in Africa and Nigeria to be precise.

Now let’s consider 24hrs a day running cost of purchasing AGO (Automotive Gas Oil) to power On-premise Data center at the cost of NGN 210 per litre after the purchase and installation of a 100Kva power Generator:

With the cost of diesel capped at NGN210 per litre with An average of 20 Litres an hour of consumed AGO x 24 Hours a day

NGN4200 x 24 = NGN100,800 /day

NGN100,800 x 365 days a year = NGN 36,792,000 (USD $102,200) on AGO yearly.

Excluding running cost of Power Generator maintenance and on-premise Data center facility maintenance.

on-premise vs SaaS
on-premise vs SaaS 2
Fig 4: Typical case study of an On-premise and colocation data center cost: Photo Credit: Microsoft

With colocation data-center services we can cut down 60% of running cost while getting rid of miscellaneous expenses and extravagant data center costs on maintenance and upgrade by just outsourcing your data center IaaS (Infrastructure as a Service) to trusted IaaS service provider like Medallion Communications considering what they have been able to do for NIRA and some other prominent organizations/ stakeholders. Least I forget; our next article we will look into Medallion Communications Ltd. And see what Medallion as a firm and technology partner can and would be able to offer as a service for targeted Enterprises / SMEs.

Meanwhile don’t hesitate to drop a comment or send me message via LinkedIn and If you like the article enough to share with like minds, kindly share the knowledge with your peers and colleagues.

About me: Dr. Krishnan Ranganath - Chief Technical Officer at Medallion Communications Limited.
Senior executive with more than 2 decades of experience in global markets working with various Multinationals across Emerging Markets. Worked with various IT/ITES and Telecommunications players for various large and very large projects.Managed projects worth $100 Million in Multi Year engagements. Managed large and disparate teams across various regions and time zones. Seasoned relationship with various OEM, SI’s and local companies across the region Instrumental and a key stakeholder in setting up and managing 6 Networks & 20 plus data centres with a proven record of monitoring the inflow & outflow of funds and ensuring optimum utilisation of available funds towards the accomplishment of organisational goals.

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