Collocation vs Cloud

The perceived wisdom of locating your applications in the Cloud is that you benefit from scalability, availability and cost. The downside is that you surrender your data to a third party so you need to ensure that you trust them implicitly.

I’ve recently had a mission to source a suitable location to host a large web application with a required availability of close to 24x7 and some guaranteed performance levels. In Cloud terminology I was looking for Infrastructure as a Service (IaaS).To give an idea of the scale, the application was expected to have over 6 million unique visits per month with over 50 million page views.

I approached 4 “enterprise” level cloud providers with a fairly detailed spec of what I expected but was fairly flexible on what they could offer as a solution. Not surprisingly, given the initial spec, the proposed solutions were what could be termed “private cloud” or something close to what used to be called Managed Hosting. Although there were some price differences, all the offers were in the same area. Most importantly, all the providers gave me confidence that I could trust them with my data. I was also sure that they could meet the availability and scalability requirements.

As a follow up exercise, I carried out a cost analysis of the Cloud Solution compared to a collocated equivalent. In order to do so it was necessary to make some fairly large assumptions including that the capital to make the initial investment in the infrastructure was available and that cost could be written off over a period of three years. Extra staff also needed to be factored in.

The end result showed that for this application the Collocate and the Cloud solutions were very similar in cost, with the Collocate slightly cheaper. What was more interesting were the costs when doubling the expected load on the application and hence the supporting infrastructure. In this case, the Collocate solution becomes up to 40% cheaper than the Cloud one as economy of scale begins to take effect.

Of course, it would be foolish to draw the conclusion that Collocate is cheaper than Cloud. There are many things to consider included how much you need the fast scalability and provisioning capabilities of some Cloud offerings, the level of support and monitoring required, your ability to recruit and retain the right staff for collocate as well as security features. What I do think is a fair conclusion is that the larger your hosting requirements, the more you should investigate the available options.