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

By: Kaylie Gyarmathy on January 8, 2021

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.

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What is On-Premises IT Infrastructure?

data center 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?

colocation servers

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 technology

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.

The Pros and Cons of The Cloud

A little under one-quarter of companies exclusively use public cloud services for their infrastructure needs, but nine out of ten companies are using cloud platforms in some capacity.


  • Scalability: One of the key advantages of cloud computing is the ability to scale computing power rapidly to meet capacity demands. This allows organizations to quickly add more processing and storage resources when they need them, which makes it easier to adapt to changing market conditions and take advantage of opportunities.
  • Versatility: Almost every type of software application is available today as a cloud-based service. Cloud providers also offer development tools and environments that can be used to create and host new applications. Almost anything that can be done with a conventional server and network can be accomplished via cloud computing services, which opens a world of possibilities for companies that might not otherwise possess the infrastructure resources to build their own solution.
  • Cost: Cloud services are typically billed on a month to month basis according to usage. Many organizations can substantial costs by shifting away from the capital investment of physical hardware and opting instead for a purely operational expense of a cloud computing service.


  • Downtime: Most public cloud providers offer uptime SLAs of 99.99%, which translates to about an hour of downtime each year. That may not sound like a lot, but considering that customers aren’t likely to forget that time they tried unsuccessfully to access online services, the risk of revenue and reputational loss is often too great for many companies to tolerate.
  • Transparency: Public cloud platforms are often very opaque when it comes to evaluating resource utilization. This results in companies using more resources than they expected and getting hit with overage fees on their monthly bill. Since the cloud platform is managed by the provider, it’s often impossible to get a sense of what is being done on the infrastructure side of things to ensure high uptime and operational efficiency.
  • Security: While the public cloud has proved to be a more secure platform than many people feared in its early days, there are still some key concerns companies have when it comes to managing their data. A public cloud may not meet the exacting compliance requirements of every industry, and changes made to the provider’s infrastructure may have an unintended or unforeseen impact on data security.

What is Edge Computing Infrastructure?

edge computing

Edge computing is the latest player on the IT architecture scene. It essentially functions like cloud computing with one notable exception. Rather than transferring data back to a centralized server, edge computing relies upon de-centralized data centers where, when the data comes in, nodes determine whether that data needs to be processed by a centralized server or if it can be handled where it came in.

The Pros and Cons Edge Computing

Because it is a variation on cloud computing, it shares some of the advantages, like cost and scalability, but it has several of its own benefits.


  • Speed: The biggest advantage of edge computing is the speed. Because the data is stored at the “edge” of the network rather than the “middle,” when it’s called on, retrieval is fast. There’s no need to send data on if it can be managed on an edge server. As a result, the network is responsive and latency is reduced, thereby improving the performance of the application or device sending/retrieving data.
  • Security: As noted above, security has long been a concern for cloud computing. However, because this architecture stores data locally, access to the cloud is restricted. More specifically, the node determines what information is relevant and sends that onward to the cloud. As a result, even if access to the cloud were hacked, only some data would be exposed rather than all of it.
  • Reliability: Because edge computing relies upon micro-data centers and on devices themselves (and not a centralized server on a network), they’re less likely to encounter network issues and suffer outages. The architecture itself provides for multiple pathways for data to get where it’s going and get there quickly.


  • Incomplete Data: It should come as no surprise that one of edge computing’s biggest strengths also comes with a disadvantage. Because some data is handled locally rather than being sent back to a centralized server, the nodes must determine what data is important and what can be discarded. As a result, there’s the potential for data that a business deems important being lost in the process.
  • Cost: Because edge computing relies upon micro-data centers, there are the initial costs of setting up those centers and the potential for increased maintenance costs as the network is spread out over multiple locations.
  • Maintenance: Similarly, because data centers are more widely spread out, in addition to a centralized location, maintenance and network management require more time and more staff to handle standard maintenance and troubleshooting issues. 

On-Prem vs. Colocation vs. Cloud vs. Edge: Which is Best for Your Needs?

Choosing the right data solution is a complex decision that will depend a great deal on the organization’s networking and computing needs. Resources are often a key determining factor. An enterprise with a large IT budget and complex compliance requirements, for instance, will find an on-premises solution much more viable and attractive than a startup company that can barely afford a single server.

For the median company, however, colocation provides the best combination of performance and affordability. This is especially true if with a colocation provider that offers infrastructure monitoring capabilities and excellent customer service, which addresses the two key areas of concern when it comes to colocation.

For companies whose applications require minimal latency, utilize the IoTs, or who plan to move into augmented reality as part of their future offerings, edge computing is where the future is. Intricately connected to 5G capabilities, it’s literally and figuratively a place for outward growth. For now, many companies will just need to “watch this space” for what’s to come. 

vXchnge-Data-Center-Austin-TX-Virtual-TourWith multiple data center locations in key growth markets across the US, vXchnge delivers superior colocation services thanks to our innovative in\site intelligent monitoring platform and unmatched remote hands services. With in\site, customers can monitor every aspect of their deployment, viewing their power and bandwidth utilization in real-time to avoid unpleasant surprises on their monthly bill. Our data centers are engineered for perfection and backed by 100% uptime SLAs to ensure superior reliability and risk mitigation.

To learn more about how we’re redefining what a colocation provider can do for your business, talk to one of our data center experts today.

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