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Colocation is pretty simple, it’s where you house your own equipment in a data centre that is operated by another provider (like an Internet Service Provider). Essentially you move some of your IT infrastructure resources into a data centre and you then look after the administration of the hardware, software and network resources. There are a number of benefits to this solution. These include:

Uptime – Greater power redundancy is afforded due to the nature of data centre power infrastructure. Additionally, tightly controlled cooling also means your server and networking equipment should have a much longer and less fault prone life.

Connectivity – Generally it is easier and cheaper to get a high connection speed in a data centre than it would be to have the same connection onsite.

Security – Systems are generally more secure from theft or physical intervention due to the security in place at these locations.

A quick Google search of this articles title will yield a number of detailed and conflicting articles that attempt to break down the cost of Colocation vs Amazon Web Service (AWS) solution. Most of these articles come to the conclusion that colocation is cheaper than an AWS solution. And for traditional workloads, and larger companies, this is generally correct. However, most of these articles generally gloss over much of the hidden costs of Colocation, and also fail to properly compare like for like features.

When doing a comparison of the solution most people just add the cost of the servers, rackspace, networking equipment and utility fees of a data centre. But this isn’t the best way to do a comparison.

What are the advantages of AWS over Colocation?

Increased redundancy

No hidden costs


Plethora of innovative tools and services that can be leveraged to transform the way IT works. 

Let’s break down AWS’s high level building blocks a little:

Each AWS region has at least three availability zones (AZ), two publicly available and one hidden to perform replication and redundancy for many of their services

Each AZ is part of your own Virtual Private Cloud network

Each AZ is linked by high bandwidth, low-latency and redundant path links

Each AZ is geographically separated from the others and is able to operate completely independently in the event of a failure

When we start looking at the level of redundancy and availability engineered in this infrastructure you will quickly need to start tripling some of the costs people are putting out there. Also, most of these comparisons fail to factor in a number of the feature rich, fault tolerant services that AWS offers for businesses to leverage to think outside the traditional IT infrastructure box. 

A great offering from AWS is S3.S3 is a truly redundant, highly available, highly scalable, feature rich storage service. S3 can and has been leveraged for all sorts of great things. In traditional workloads (virtual machines VM’s) you can use S3 to store snapshot data, leveraging redundancy it offers to allow rapid restoration of VM’s to another AZ should one location be lost.

Another great offering is AWS’s RDS service. RDS is a relational database service which is managed by AWS. AWS will even look after the redundancy of the service. To engineer a similarly redundant service in-house would not only take a rather pricey salary, but also increased facilities management, power and utility overheads.

AWS offers a plethora of products that can be leveraged in a massive number of ways and they are continually innovating, improving existing products and releasing new ones.

Another additional consideration is lifecycle management. If you are managing physical infrastructure you need to budget and plan for a refresh of the equipment every 5 years. The cost of this to the business is far greater than just the cost of hardware. There is also the staff to perform the refresh and the interruption to general business and management overhead. With AWS this isn’t required at all, you only need to consider the lifecycle of the application.

In summary, the value of AWS should not be quantified in just comparing server and storage costs from a single colocation facility. AWS’s service and offering makes building a comparable solution in house an extremely time consuming  and expensive endeavour. While Colocation can be a viable option for some businesses with traditional workloads; for those who want to focus their energy on what their businesses to best, AWS is definitely a great solution that offers many opportunities to transform the way your IT works for you.