Hybrid cloud colocation gives your company more flexibility with where you run workloads. It brings the best of cloud-based and on-prem infrastructure together—without locking you into either.

We discuss:

• What hybrid cloud colocation actually means
• How colocation works in cloud computing
• Why colocation still matters for modern enterprise workloads
• Key benefits of hybrid cloud colocation
• A quick comparison: colocation vs. cloud vs. managed hosting
• Real-world use cases for hybrid cloud colocation
• How to build a strategy that connects colocation and cloud
• Common pitfalls and how to avoid them
• Frequently asked questions about hybrid cloud and colocation
• Why Meter Connect is built for hybrid cloud colocation

What is hybrid cloud colocation?

Hybrid cloud colocation means using both public cloud and your own hardware in a shared data center. You rent space in a colocation facility for the parts of your stack that need more control or consistent performance, while sending flexible workloads to the cloud.

Colocation connects directly to cloud platforms through high-speed fiber or cloud on-ramps. That link makes it easier to split your infrastructure between cloud and on-prem without adding delay or complexity.

Many teams use colocation cloud services to host critical apps, store sensitive data, or reduce latency near cloud zones.

It’s a smart fit for:

• Edge workloads
• Regulated industries
• High-performance apps

Edge workloads keep processing close to users or devices to cut latency. Regulated industries like healthcare, finance, and government teams often use colocation to meet strict rules around data handling.

What is colocation in cloud computing?

In cloud computing, colocation means placing your own servers inside a third-party data center. You rent space, power, and internet access—but you still own and manage the hardware. If you’ve ever wondered what colocation means, it’s about having full control of your gear while someone else manages the building.

The colocation provider handles the building, cooling, backup power, and physical security. You just bring your equipment and set it up the way you want.

It’s not the same as public cloud, where the provider owns everything. Plus, it’s different from managed hosting, where they rent you hardware and often control how it’s set up.

Colocation gives you full control. You choose the hardware, software, and setup. That’s why it’s still used today—especially for hybrid cloud. You can run some apps on-site while sending others to the cloud. This setup works well for apps that need fast performance or tight control over data.

Key benefits of combining hybrid cloud and colocation

Running both cloud and colocation together gives you more control over how and where workloads run. You get the flexibility of the cloud and the reliability of your own equipment—all under one strategy.

Save money while staying flexible

Cloud pricing changes with usage, but colocation costs stay the same. You pay once for your hardware and rent space in a facility. That setup works well for steady workloads. When things spike, cloud handles the extra demand without needing to build more on-site.

Lower latency for demanding apps

Data travels faster when your servers are near cloud zones or users. Many colocation sites are close to cloud on-ramps, which cuts network distance. That helps with apps like gaming, trading, or live video.

Full control over your setup

You decide what gear to use, what software to install, and how updates happen. Public cloud offers less flexibility. With a hybrid cloud, you get both control and access to cloud services when needed.

Better protection against downtime

Top-tier colocation providers offer backup power, multiple network paths, and carrier diversity. That helps keep your systems online even if one link fails. Network redundancy adds an extra layer of safety.

Meet data and privacy rules

Some industries need to keep data in a specific location. Hybrid setups let you choose where data is stored and how it’s accessed. That supports compliance with rules like HIPAA, PCI-DSS, and GDPR.

Grow without overbuilding

Public clouds are great for scaling fast. Hybrid setups let you run your base workloads on-site, then burst to cloud during peak times. No need to buy extra gear just to handle short-term spikes.

Colocation vs. cloud vs. managed hosting: How to choose

Colocation gives you full control over hardware and software. Cloud offers fast scaling and flexibility. Managed hosting sits in the middle—less control, but less hands-on work.

Use colocation when you need custom setups, strict compliance, or steady performance. Cloud works better for fast-changing workloads. Managed hosting is a good fit if you want help running apps but don’t need full ownership.

For a deeper look at what differentiates these setups, check out our article on Colocation vs. Managed Hosting vs. Cloud.

Hybrid cloud colocation use cases

Many teams use hybrid cloud colocation to solve real business problems. It’s not just about splitting workloads—it’s about placing them where they make the most sense. Below are common ways companies use a hybrid setup.

Edge computing and IoT

Devices like sensors and smart machines need fast data processing. Sending everything to the cloud adds delay. With colocation close to the edge, data gets processed faster before syncing to the cloud later.

Cloud bursting during peak demand

Not every workload needs the cloud all the time. You can run stable apps in colocation, then burst into the cloud when traffic spikes—like during product launches or busy seasons.

Disaster recovery

Using colocation in a second location creates a strong backup plan. If your main site goes down, cloud services can quickly spin up copies of your apps and data to keep things running.

Security and compliance zones

Certain workloads need extra protection. Keeping them on hardware you control helps with monitoring and access rules. That’s helpful for meeting security standards in healthcare, finance, and other regulated industries.

Hybrid application architectures

Some systems work better when parts are split. You might run a database in colocation for better performance, while cloud handles the front-end or APIs. This setup helps manage traffic and costs without hurting speed.

How to architect a hybrid cloud + colo strategy

Getting the most out of hybrid cloud and colocation starts with a solid plan. You don’t need a massive overhaul—just clear thinking about what belongs where and how everything connects. Here’s how to build a strategy that actually works.

Assess your workloads

Some workloads run better on your own gear. Others need cloud flexibility. Start by sorting them based on how sensitive they are to delay, whether they deal with regulated data, or how much they grow and shrink.

Map how your data moves

Data shouldn’t bounce around more than it has to. Draw out how it moves between cloud, colocation, and your offices. Fewer hops means better performance and fewer points of failure.

Choose a carrier-neutral facility

Not all colocation sites are the same. A good one gives you access to multiple internet providers, not just one. That helps with price and adds flexibility. You’ll also want direct cloud access for faster, cheaper connections.

Add private cloud links

Cloud traffic doesn’t have to go over the public internet. Use private connections to link your colo setup with cloud platforms. It’s faster and more secure.

Connect everything with SD-WAN or direct lines

SD-WAN makes it easier to manage traffic between sites. Direct fiber connections can give you even more speed and control. Either option beats a mess of random VPNs.

Don’t skip network design or security

A weak network slows everything down. Good network design keeps your apps running smoothly, and secure design protects your data from outside threats.

Think ahead

You don’t want to hit a wall when your team grows. Network capacity planning helps you stay ahead of bandwidth, power, and space needs.

Common challenges of hybrid cloud colo

Blending cloud and colocation gives you more flexibility, but it’s not always simple. Without a strong foundation, things can get messy fast—especially when networks, security, and budgets aren’t aligned.

These challenges show how important it is to treat hybrid setups as part of broader enterprise networking—not just isolated cloud projects.

Mixing networks gets tricky fast

Running both cloud and colocation can stretch your network across different tools, platforms, and providers. That often leads to network sprawl—where it’s hard to track what’s connected, what’s exposed, and how traffic flows.

Teams can lose visibility into critical paths, making performance and security harder to manage.

Using managed services with built-in software-defined tools can help by bringing everything under one pane of glass. You’ll have better control over traffic, policies, and uptime.

Security gaps between environments

Even if your on-prem setup is locked down, traffic between cloud and colocation often travels a separate path. Without encrypted links or tight firewall rules, that gap becomes a target.

One weak connection is all it takes. Private interconnects and zero-trust access models help limit exposure, especially when combined with tools like full packet inspection.

Keeping both environments in sync with shared policies and identity access tools also reduces risk.

Cloud costs can spiral without notice

Cloud makes it easy to spin up resources—but just as easy to forget about them. Orphaned instances, unused storage, or always-on workloads quietly run up your bill.

You can stay ahead of this with tagging, budget alerts, and policy automation that shuts down unused resources. Hybrid setups make cost management harder, so tracking usage across both environments is key.

Latency sneaks in if you're not careful

Some colocation sites aren’t near major cloud zones, and that matters.

The farther your workloads have to travel, the more lag and transfer cost you’ll see. Slow links create bottlenecks that drag down app performance.

You’ll want a facility with direct access to top cloud providers, plus high-speed private fiber to reduce distance and boost reliability. Carrier-neutral colos offer more options and better traffic routing.

Frequently asked questions

Is colocation cheaper than cloud?

Colocation can be more cost-effective for steady workloads that run 24/7. Cloud often costs more over time when workloads stay active.

What’s the difference between colocation and managed hosting?

Colocation lets you own and manage your hardware in a third-party facility. Managed hosting gives you rented gear that’s handled by the provider.

Can colocation support cloud bursting?

Hybrid setups allow you to run core apps in colocation and burst up to the cloud when demand spikes. It’s a smart way to handle peak traffic without overbuilding.

How does colocation improve compliance?

You control where your data lives, who accesses it, and how it’s secured. That helps meet strict rules like HIPAA, PCI-DSS, and GDPR.

Do I need carrier-neutral colocation for a hybrid cloud?

Carrier-neutral sites give you access to multiple ISPs and direct cloud connections. That means better pricing, less downtime, and more control.

How do I connect colocation to the cloud?

Private fiber links, cross-connects, or SD-WAN can tie your environment together. These options reduce latency and improve security between sites.

Partner with Meter Connect

Hybrid cloud colocation only works if your internet service is reliable, secure, and professionally managed. That’s exactly what Meter Connect delivers.

We handle ISP procurement, installation, and ongoing support—so you don’t have to chase down carriers or manage outages yourself. With Meter Connect, you get a single point of contact for everything related to your internet connection.

Need more than just ISP management? Meter provides fully vertically integrated networks that cover your infrastructure end-to-end—from design to deployment to maintenance. It’s the next step if you want your entire network handled by one expert team.

Request a quote from us today on Meter Connect.