A colocation is a data center facility in which a business can rent space for servers and other computing hardware. Today a colocation center provides the building, cooling, power, bandwidth and physical security while the customer provides servers and storage. Space in the facility is often leased by the rack, cabinet, cage or room. Many colocation facilities have extended their offerings to include managed services that support their customers’ business initiatives.

Cloud providers on the other hand operate and run banks of servers in data center colocation facilities. They lease space on those servers and assume the operations expenses and maintenance to run them for their customers; Cloud computing is the back-end IT operation in which a firm leases functionality. With colocation, your IT team is responsible for the purchase and maintenance of your hardware and software; many businesses use colocation as a second IT operation either because they have outgrown their physical structure or when they need a fully equipped disaster recovery site. Cloud is beneficial when you what you are looking for is functionality; if you are in need of an additional suite of applications for example, that your IT team cannot provide, or if you want your IT staff to focus on other areas, then purchasing this functionality in terms of cloud services, is what fits you best.