Cloud Computing Concept with three clouds designed technologically in appearance

Have you ever wondered what the difference is between “Cloud” and “data centers”? What about Public Cloud, Private Cloud, Hybrid Cloud, insourcing, outsourcing, and colocation services?  

When researching cloud computing options for your business, it’s important to know specifically what you are comparing when it comes to these often-confused terms. In this blog, we explain what “Cloud” and “data center” refer to specifically and the differences in how each cloud computing option serves your business.

Are You Talking About “Cloud” or “Data Center”?

When talking about Cloud, it’s a reference to cloud computing, which is the delivery of computing services over the Internet. Types of cloud services include infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS). IaaS is further subdivided into Private, Public, and Hybrid. Cloud services come in different shapes and sizes, but most are highly scalable, handled by your provider, and you only pay for what you need when you need it.

Where it can get tricky is understanding the three models by which cloud computing is deployed: Public Cloud, Hybrid Cloud, and Private Cloud.

Public Cloud is the most commonly used deployment of cloud computing, where a provider manages and maintains your hosting solution for you. When people simply speak of “Cloud,” they most commonly mean this kind of outsourcing to a provider. The key to Public Cloud is that the infrastructure resource pools you subscribe to are shared by other companies. None of the resources are yours entirely or discretely in terms of deployment.

If you are talking about Private Cloud, a hosting provider still provides and manages the infrastructure, but that infrastructure is dedicated to you. It’s your dedicated resource pool, or at least most of it. You may share CPU and memory, but the storage allocation is typically on a separate SAN dedicated to you.

There’s also a combination of both Public and Private Cloud: Hybrid Cloud. Hybrid Cloud allows a company to utilize both cloud computing methods as needed for a more custom solution.

On the other hand, if you’re talking about a data center, this is insourcing. Many people call this Private Cloud, but that’s incorrect. You own the data center, the infrastructure and likely your staff manages everything. Any virtualization that takes place is simply your company buying software and virtualizing the infrastructure you own. This deployment is very traditional in every way. Insourcing is called as such because your company either capitalizes the elements or leases some of them, but it’s highly capital intensive. It’s not technically Cloud, because Cloud always refers to outsourcing.

What about colocation services? The term Colocation refers to a commercial datacenter. You are essentially leasing data center space, power, and cooling from a company that owns and manages the data center. The “co” in colocation services refers to the fact that other companies put their servers and infrastructure in the same building. That infrastructure is typically housed in separate, locked cabinets or cages dedicated to your company’s infrastructure, but you share the power, cooling and other building infrastructure.

Letters "V" and "S" written on two seperate black cubes on a wooden background with the left side behind the V colored turquoise to show the concept of comparison

The Key Differences Between Hosting Your Own Data Center and Going to the Cloud

When comparing insourcing versus outsourcing to a provider, how do you know which solution is best for your business? Compare the key differences between hosting your own data center on-premise and seeking out a cloud services provider:

Insourcing with an on-premise data center:

  • Slower time to market
  • Lacks scalability and flexibility
  • Physical and geographical constraints
  • Fine-tuned control of, and access to, your environment, security, and data
  • Increased responsibility and overhead to keep your business operations running smoothly
  • Difficult to achieve 24/7 monitoring by on-site staff
  • Increased risks, unless you are experienced with industry regulations and handling disaster recovery (DR)
  • Offers no geographic separation for mitigating disaster and operational risks
  • 4-5 times more expensive than outsourcing, assuming you have all the talent and expertise in-house to make it work

Outsourcing to a cloud services provider:

  • Faster time to market
  • On-demand scalability and flexibility
  • Independence from physical and geographical constraints
  • Relinquishing some control of your environment, security, and data
  • You can focus on your core business without the distraction of supporting a non-core business expense
  • Provider can handle 24/7 monitoring for you
  • Your provider’s expert staff should be experienced in industry regulations and handling disaster recovery (DR) to reduce risk
  • Provides better geographic separation for mitigating disaster and operational risks
  • Significant cost savings and conservation of capital, only paying for the services you need

Looking for another option?

The benefit of choosing Hybrid Cloud is it allows you to have continued control over critical data with Private Cloud infrastructure while leveraging Public Cloud services for non-sensitive data.

Having a colocation site can serve as a beneficial compromise between insourcing everything and passing off responsibilities to a provider.

3D illustration of server room in data center full of telecommunication equipment as a concept for colocation services or cloud computing technology

Which Option is Right for Your Business?

Hands down, it’s almost always a better idea to outsource data center services thanks to several financial and functional benefits. At the very least, if you still want to buy your own equipment, virtualize, and staff for the management of your own infrastructure, you can still leverage a commercial colocation data center facility to house all of your infrastructure for you in a professionally maintained environment with colocation services.

Long-term, it rarely if ever makes sense to build and maintain your own data center. There are some exceptions, for instance, if that’s your main business, you have a very unique circumstance, or you have an abundance of capital you don’t know what to do with.

Otherwise, you’ll want to seek out a trustworthy cloud services provider like LightBound, who will be a true partner to your business and ensure an easy and pain-free transition to Cloud. Contact LightBound today to learn more about your options for harnessing the power of Cloud and get answers from our experts about any cloud computing questions you might have.