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The Pros and Cons of On-Prem vs. Colocation vs. Cloud vs. Edge


researchHQ’s Key Takeaways:

  • While it may be good for control, compatibility and compliance, traditional on-premise IT infrastructure is often inflexible, inefficient and unreliable.
  • Data centre colocation is more reliable, versatile and efficient; however, there is potential for reduced visibility and control.
  • Cloud computing is known for its scalability, versatility and cost reductions, yet, this comes at the cost of a lack of transparency and greater security complexity.
  • Edge computing shares many of the cloud’s benefits in addition to increased speed, security and reliability; however, local data management introduces the risk of incomplete or lost data.
  • Choosing a data solution ultimately comes down to each organisation’s networking and computing needs.


In today’s digital economy, technology has become an essential component of every business. Without a reliable network in place, companies will have difficulty attracting new customers and delivering services to their existing customers. When building out their network systems, organizations must decide what type of infrastructure they want to work with. Typically, their three choices are an on-premises solution, a colocation data center, or a public cloud platform with edge computing entering the scene more recently. Making the best choice between on-prem vs colocation vs cloud vs edge requires a careful examination of the advantages and disadvantages of each.

What is On-Premises IT Infrastructure?

Simply put, on-premise IT infrastructure means your business maintains its own infrastructure including all of the hardware needed to efficiently and effectively run your network. Whether it is a dedicated private data center or a modest server closet, organizations with on-premise infrastructure manage every aspect of their network from the software applications down to the outlets delivering power to them (and the cable behind the outlets as well).

The Pros and Cons of On-Prem

About one-third of companies using physical infrastructure rely solely upon an on-premises solution of some kind. There are some benefits to keeping their technology infrastructure completely in-house.


  • Control:Keeping data, applications, and essential infrastructure in-house means retaining complete control over all aspects of a deployment. The IT department knows doesn’t have to worry about anyone outside the organization changing configurations or accessing data inappropriately. They don’t have to deal with a third-party vendor’s rate or policy changes.
  • Compliance: Many organizations have complex compliance needs that they are hesitant to entrust to a third party. By keeping everything in-house, they can continuously monitor their compliance status to mitigate risk.
  • Compatibility: If an organization relies heavily upon legacy hardware or applications, it could create severe problems by migrating to another technology solution. While it’s certainly possible to move legacy applications into a new environment, there are often risks associated with the process. If migrating legacy systems could endanger business operations, it might make sense to stick with an on-premises solution.


  • Inefficiency: Most on-premises solutions are woefully inefficient. Because the cost of building a private data center is so high, these facilities are often quite dated or converted from structures that were intended for some other purpose. That means they’re rarely optimized for the power and cooling needs of modern, high-density servers, leading to much higher operational costs. Efforts to update would also likely come with significant expenditures impacting the bottom line.
  • Inflexible: An in-house data solution was likely designed to handle the network demands needed at that time, but usually nothing more than that. In other words, it’s likely at capacity. That means if demand increases or if new services need to be offered, new equipment or software will need to be provisioned and installed. This process can take a great deal of time, and by the time work is completed, the business opportunity may have passed. Unless the infrastructure was built with scalability in mind, this is likely to be a major issue as a business grows. In fact, it’s likely to throttle growth opportunities.
  • Unreliability: In addition to being outdated, many on-premises solutions lack extensive backup systems to provide for disaster recovery capabilities. In fact, if the system is functioning at capacity, without redundancies built in, the system is in danger of a crash. Without sufficient back up, networks and services may suffer from frequent system downtime. Because on-premise data centers usually aren’t staffed by IT technicians 24x7x365, when a server goes down at 2:00 AM or on the weekend, it usually takes quite some time for someone to address the problem. By the time the issue is resolved, it’s likely already impacted customers or clients and rattled their faith in your business’s reliability.

What is Colocation IT Infrastructure?

Data center colocation is a fast-growing trend that allows companies to place their servers and other essential IT hardware within a third party facility that provides the essential infrastructure for their systems. The customer retains control over their assets once they’re migrated, while the colocation provider handles the power, cooling, security, and connectivity.

The Pros and Cons of Colocation

About two-thirds of companies using physical infrastructure use a colocation data center either exclusively or in combination with an on-premises solution of some kind.


  • Reliability: Colocation data centers tend to use much more robust infrastructure than the average on-prem solution. They have extensive operational redundancies that allow them to keep their essential systems up and running even in the event of a natural disaster. A quality colocation provider should guarantee nothing less than 100% uptime reliability through their SLA.
  • Versatility: Since colocation facilities have the ability to accommodate multiple tenants, scaling capacity is as easy as installing a new server into a rack. Unlike an on-prem solution, there’s always enough power and cooling infrastructure to support additional growth. Direct cloud on-ramps also make it possible for customers to scale into the cloud by constructing hybrid IT environments that leverage the advantages of a physical data center along with the expansive power of cloud computing. More importantly, since the colocation provider is managing the infrastructure, internal IT teams are freed up to work on developing innovative products and services rather than troubleshooting hardware issues.
  • Efficiency: Modern colocation facilities keep pace with the latest developments in data center power and cooling, which allows them to keep costs under control more effectively. Setting aside the substantial cost savings of not having to build a data center (which is a prohibitively expensive investment for most companies), colocation also saves money month over month due to better optimization and energy efficiency.


  • Potential Lack of Visibility/Control: Many colocation providers fail to provide customers with the tools they need to monitor their deployments effectively. This can leave companies feeling like they’re in the dark when it comes to determining how much power and bandwidth they’re using each month. Similarly, if performance issues arise, depending on a third-party to perform maintenance can create issues.
    This isn’t always an issue for every provider, however. vXchnge customers can use the in\site intelligent monitoring platform to get real-time data about every aspect of their colocated assets. The platform also enables customers to report issues and have them handled by remote hands, which allows you to request management and maintenance from IT technicians located at the data center.
  • Potential for Poor Customer Service:Dealing with any third-party provider creates potential challenges related to customer service. If a colocation data center isn’t well-managed or dedicated to customer success, it may be slow to respond to issues and fail to deliver the assistance companies require. While many data centers provide some monitoring to allow you to see what happened after an issue has arisen, vXchnge’s intelligent monitoring system allows you to stay abreast of issues in real time ensuring better customer service and control.

What is a Cloud IT Infrastructure?

Cloud computing has had a tremendously democratizing effect on many industries, allowing companies to gain access to computing infrastructure they would never have been able to amass in an on-premises solution in years past. While many hosting providers offer virtual private cloud hosting, most people think of public cloud providers when they talk about cloud computing.

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