Cloud and Colocation Providers UK 2026: Compare Costs & Options
Quick Summary:
Cloud and colocation are two different ways for businesses to host IT infrastructure, applications, servers, storage and data.
Cloud hosting lets your business use computing resources from a provider without owning the physical hardware.
Colocation lets your business place its own servers and equipment in a third-party data centre, while the provider supplies power, cooling, connectivity and physical security.
Many UK businesses now compare cloud, colocation and hybrid options because they need:
- reliable hosting
- secure data storage
- better uptime
- disaster recovery
- scalable infrastructure
- lower on-site IT burden
- cloud migration
- data centre space
- private cloud
- public cloud
- hybrid cloud
- backup and recovery
- Microsoft Azure support
- AWS support
- UK data centre options
- connectivity to cloud platforms
- predictable IT infrastructure costs
As a simple guide:
| Option |
Best for |
|
| Public cloud |
Businesses needing scalable, on-demand resources |
|
| Private cloud |
Businesses needing dedicated or controlled infrastructure |
Monthly managed service pricing
|
| Hybrid cloud |
Businesses combining on-premise, cloud and colocation |
|
| Colocation |
Businesses owning servers but wanting data centre facilities |
Rack space, power and connectivity pricing
|
| Managed hosting |
Businesses wanting provider-managed servers |
Monthly hosting/support pricing
|
| Cloud backup |
Businesses protecting files, systems and applications |
Per user, per GB or per workload
|
| Disaster recovery |
Businesses needing continuity after outage or data loss |
Recovery-point and recovery-time based pricing
|
| Cloud connectivity |
Businesses needing better access to AWS, Azure or data centres |
Connectivity and bandwidth pricing
|
Compare Cloud and Colocation Providers
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Compare cloud and colocation providers in the UK
Use this guide if you are comparing:
- cloud and colocation providers UK
- colocation providers UK
- cloud hosting providers UK
- business cloud hosting
- managed cloud hosting
- private cloud providers
- public cloud providers
- hybrid cloud providers
- data centre colocation UK
- server colocation UK
- rack space UK
- managed hosting providers
- cloud backup providers
- disaster recovery providers
- AWS vs Azure for business
- cloud vs colocation
- colocation vs cloud hosting
- UK data centre providers
- cloud migration services
- cloud connectivity
- dedicated hosting
- infrastructure as a service
- business server hosting
- secure cloud hosting
- cloud storage for businesses
How do we work?
Transparent, impartial, and data‑driven reviews made by a team of expert humans, never AI generated – here’s exactly how Compare Your Business Costs helps you find the best deals from trusted UK providers: click here
Authored by: Ally Cox (Business Technology & B2B Services Specialist 10+ Years’ Experience)
Reviewed by: James Ward (Telecoms Specialist, 12+ Years Experience)
Last Updated: August 2026
Key takeaways
- Cloud and colocation solve different infrastructure problems.
- Public cloud is usually best for scalable, flexible and usage-based workloads.
- Colocation is usually best when your business owns servers and wants secure data centre facilities.
- Hybrid cloud combines cloud, colocation, on-premise systems and managed services.
- Cloud pricing can be difficult to predict unless workloads, storage, data transfer and support are scoped carefully.
- Colocation pricing depends heavily on rack space, power, bandwidth, location, resilience and remote hands support.
- AWS and Azure are major public cloud platforms, but many UK SMEs may need a managed cloud partner rather than buying cloud directly.
- Data centre providers such as Equinix focus on colocation, interconnection and physical infrastructure rather than simple website hosting.
- The cheapest option is not always best if uptime, support, data protection or migration risk are weak.
- Compare providers based on workloads, compliance, support, connectivity, resilience and total monthly cost.
Contents:
What is cloud hosting?
What is colocation?
Cloud Vs Colocation
Cloud, colocation or hybrid: which should you choose?
Cloud and colocation costs UK
Cloud provider types
Cloud and colocation providers UK
AWS vs Azure vs managed cloud vs colocation
Cloud vs colocation: pros and cons
Cloud and colocation security
What is cloud hosting?
Cloud hosting lets businesses use computing resources delivered over the internet – so, instead of buying and maintaining physical servers, your business can rent resources such as:
- virtual machines
- storage
- databases
- backup
- networking
- firewalls
- application hosting
- development environments
- disaster recovery
- analytics
- AI services
- security tools
Cloud hosting can be public, private or hybrid.
Public cloud
Public cloud uses shared provider infrastructure – think of things like…
- AWS
- Microsoft Azure
- Google Cloud
- Oracle Cloud
- IBM Cloud
You do not own the hardware.
You pay for the services you use.
This can work well for businesses that need scalability, flexibility and access to a wide range of services.
Private cloud
Private cloud gives your business more dedicated or controlled infrastructure and can be hosted in:
- a provider data centre
- a private hosted environment
- your own data centre
- a colocation facility
- a managed hosting platform
Private cloud can suit businesses with stricter control, performance or compliance requirements.
Hybrid cloud
Hybrid cloud combines more than one infrastructure model.
For example:
- Azure plus on-premise servers
- AWS plus colocation
- private cloud plus public cloud
- colocation plus managed backup
- on-premise systems plus cloud disaster recovery
Hybrid cloud is common when businesses are moving gradually from legacy infrastructure to cloud.
What is colocation?
Colocation means placing your own servers, storage or networking equipment in a third-party data centre where the colocation provider supplies the facility, including:
- rack space
- power
- cooling
- physical security
- connectivity
- fire protection
- resilience
- access controls
- remote hands support
- carrier access
- data centre operations
Colocation is often used by businesses that want:
- control over hardware
- data centre resilience
- lower risk than hosting servers on-site
- better connectivity
- physical security
- predictable infrastructure
- hybrid cloud access
- disaster recovery
- high-performance workloads
- ownership of existing equipment
Cloud vs colocation
| Feature |
Cloud hosting |
Colocation |
| Hardware ownership |
Provider owns hardware |
Your business owns hardware |
| Infrastructure location |
Provider cloud platform |
Third-party data centre |
| Scalability |
Usually high and fast |
Depends on hardware and rack capacity |
| Upfront cost |
Usually lower |
Higher if buying equipment |
| Monthly cost |
Usage-based or subscription |
Rack, power, bandwidth and support |
| Control |
Less hardware control |
More hardware control |
| Maintenance |
Provider handles infrastructure |
Your IT team usually maintains hardware |
| Best for |
Flexible, scalable workloads |
Businesses needing control over servers |
| Cost risk |
Usage spikes, storage, data transfer |
Power, space, hardware and support |
| Support model |
Depends on plan or managed partner |
Basic facility support unless managed |
| Common buyer |
IT, finance, digital teams |
IT infrastructure and operations teams |
Cloud, colocation or hybrid: which should you choose?
| Business situation |
Best option to compare first
|
| You want to avoid buying servers |
Public cloud or managed cloud
|
| You already own server hardware |
Colocation |
| You need fast scalability |
Public cloud |
| You need control over hardware |
Colocation or private cloud
|
| You are moving gradually from on-premise systems |
Hybrid cloud |
| You need UK data centre hosting |
Colocation or UK managed cloud
|
| You need disaster recovery |
Cloud backup, DRaaS or colocation backup
|
| You have unpredictable workloads |
Public cloud |
| You have predictable long-term workloads |
Colocation, private cloud or reserved cloud capacity
|
| You need Microsoft integration |
Azure or Microsoft-focused managed cloud
|
| You need AWS services |
AWS or an AWS managed partner
|
| You want provider-managed infrastructure |
Managed cloud or managed hosting
|
| You need low-latency data centre connectivity |
Colocation or cloud connectivity
|
| You need physical access to hardware |
Colocation |
Cloud and colocation costs UK
Cloud and colocation costs vary widely because businesses buy very different infrastructure.
| Cost item |
Typical UK cost pattern |
What affects it |
| Public cloud compute |
Usage-based |
Virtual machine size, region, hours, CPU and memory
|
| Cloud storage |
Per GB/TB and access tier |
Storage volume, retrieval, replication and backups
|
| Cloud data transfer |
Usage-based |
Egress, inter-region traffic and network design
|
| Managed cloud support |
Monthly service fee |
Support hours, monitoring, patching and management
|
| Cloud backup |
Per user, per device, per GB or per workload |
Data volume, retention and recovery requirements
|
| Disaster recovery |
Monthly plus testing/setup |
Recovery time, recovery point and workload complexity
|
| Colocation rack space |
Per rack, half rack, quarter rack or U |
Space, location and facility tier
|
| Colocation power |
Per kW or power allocation |
Server density, redundancy and consumption
|
| Colocation bandwidth |
Commit or usage-based |
Transit, cross-connects and data transfer
|
| Remote hands |
Hourly or support package |
Engineer tasks and access needs
|
| Cross-connects |
Monthly and setup fees |
Carrier, cloud or data centre interconnection
|
| Migration/setup |
Project-based |
Cloud migration, server move or application changes
|
Cloud provider types
Public cloud providers
Public cloud providers offer large-scale computing platforms – think:
- AWS
- Microsoft Azure
- Google Cloud
- Oracle Cloud
- IBM Cloud
Best for:
- scalable apps
- data platforms
- cloud-native workloads
- development teams
- analytics
- AI services
- global infrastructure
- flexible computing
Managed cloud providers
Managed cloud providers help businesses design, migrate and support cloud environments and can support platforms such as:
- AWS
- Microsoft Azure
- Google Cloud
- private cloud
- VMware environments
- Microsoft 365
- cloud backup
- disaster recovery
Best for:
- SMEs without cloud engineering teams
- businesses migrating from servers
- businesses needing support
- organisations needing monitoring and patching
- businesses wanting cloud cost management
Colocation providers
Colocation providers operate data centres where businesses can place their own equipment.
Examples include:
- Equinix
- Digital Realty
- Telehouse
- Global Switch
- Pulsant
- iomart
- local UK data centre providers
Best for:
- owned servers
- hardware control
- low-latency workloads
- predictable infrastructure
- private cloud
- hybrid cloud
- disaster recovery
- businesses needing physical data centre space
Connectivity-led providers
Some telecoms providers offer cloud, colocation, data centre access or cloud connectivity alongside network services.
Examples include:
- BT Business
- Virgin Media O2 Business
- Vodafone Business
- Daisy Communications
- Gamma
- Colt
- Spitfire
- Amvia
Best for:
- businesses needing connectivity and hosting together
- multi-site organisations
- businesses using leased lines or WAN services
- businesses needing cloud access and data centre connectivity
- SMEs wanting one provider relationship
Cloud and colocation providers UK
This is not a fixed ranking. The right provider depends on whether you need public cloud, managed cloud, colocation, hybrid hosting, backup, disaster recovery or connectivity.
| Provider or route |
Why businesses compare it |
Best suited to |
| AWS |
Large public cloud platform with broad compute, storage, database, analytics and AI services |
Cloud-native, scalable and technical workloads
|
| Microsoft Azure |
Public cloud platform with strong Microsoft ecosystem and hybrid cloud options |
Microsoft-first businesses and enterprise cloud
|
| Google Cloud |
Public cloud platform with data, AI and cloud-native services |
Data, analytics and cloud-native teams |
| Oracle Cloud |
Cloud platform often compared for database and enterprise workloads |
Oracle users and enterprise systems |
| IBM Cloud |
Cloud and hybrid infrastructure options |
Enterprise and hybrid infrastructure |
| Equinix |
Global colocation, interconnection and data centre services |
Businesses needing colocation and data centre connectivity
|
| Digital Realty |
Large-scale data centre and colocation provider |
Enterprise and data-heavy infrastructure |
| Telehouse |
Carrier-dense London data centre and colocation provider |
Connectivity-heavy and low-latency use cases
|
| Pulsant |
UK cloud, colocation and managed services |
UK businesses wanting hybrid infrastructure support
|
| iomart |
Cloud, hosting and managed services |
SMEs and mid-market cloud/hosting needs |
| BT Business |
Cloud, colocation, connectivity and managed network services |
Businesses wanting connectivity and hosting together
|
| Virgin Media O2 Business |
Connectivity, cloud and data centre services |
UK connectivity-led businesses |
| Daisy Communications |
Cloud, hosting, telecoms and managed IT services |
SMEs wanting managed support |
| Focus Group |
Managed cloud, IT, telecoms and connectivity |
SMEs wanting bundled technology services |
| Spitfire |
Connectivity, voice and cloud-related services |
Telecoms-led cloud connectivity buyers |
| Amvia |
Business telecoms, connectivity and Microsoft-focused services |
SMEs comparing cloud and connectivity options
|
| Managed service providers |
Cloud migration, backup, monitoring and support |
Businesses wanting help choosing and running cloud
|
AWS vs Azure vs managed cloud vs colocation
| Option |
Best for |
Watch out for |
| AWS |
Highly scalable workloads, cloud-native apps and broad service choice |
Pricing complexity and need for cloud expertise
|
| Microsoft Azure |
Microsoft-first businesses, hybrid cloud and enterprise systems |
Licensing, architecture and cost management complexity
|
| Google Cloud |
Data, analytics, AI and modern app development |
Ecosystem fit and migration planning |
| Managed cloud |
SMEs needing provider support |
Service scope and support boundaries |
| Private cloud |
Controlled or dedicated infrastructure |
Higher setup and management needs |
| Colocation |
Businesses owning servers |
Hardware ownership and maintenance responsibility
|
| Hybrid cloud |
Mixed legacy, cloud and owned infrastructure |
Design complexity and supplier coordination |
Cloud vs colocation: pros and cons
Cloud pros
- scalable resources
- lower upfront hardware cost
- fast deployment
- broad range of services
- remote access
- backup and recovery options
- global platform options
- good for changing workloads
- strong automation potential
Cloud cons
- costs can rise unexpectedly
- pricing can be complex
- less hardware control
- possible vendor lock-in
- data transfer costs
- needs governance and monitoring
- technical setup still matters
Colocation pros
- control over hardware
- data centre power and cooling
- physical security
- predictable infrastructure
- carrier and cloud connectivity options
- useful for owned equipment
- can support hybrid cloud
- avoids hosting servers in office premises
Colocation cons
- upfront hardware costs
- hardware maintenance responsibility
- remote hands may cost extra
- scaling can require new hardware
- data centre location matters
- migration can be disruptive
- support scope varies
Hidden cloud costs to check
Cloud pricing can be difficult because many costs are usage-based, so check for:
- compute hours
- storage volume
- backup storage
- snapshots
- data transfer out
- inter-region traffic
- database usage
- managed services
- load balancers
- security tools
- monitoring
- logging
- reserved instance commitments
- licensing
- support plans
- disaster recovery
- development environments
- unused resources
- over-provisioned virtual machines
Hidden colocation costs to check
Colocation pricing can also include extras, so be sure to check for:
- rack space
- power allocation
- power overage
- cooling
- cross-connects
- internet transit
- IP addresses
- remote hands
- hardware installation
- shipping and receiving
- access cards
- additional security
- backup power
- managed firewall
- backup services
- monitoring
- contract term
- setup fees
- migration costs
- insurance
- equipment replacement
- travel to data centre
- cloud connectivity
Cloud and colocation security
Cloud and colocation security works differently.
| Security area |
Cloud |
|
| Physical security |
Provider responsibility |
Data centre provider responsibility
|
| Hardware security |
Provider responsibility |
|
| Operating system security |
Shared or customer responsibility |
Usually your responsibility
|
| Application security |
Usually customer responsibility |
Usually your responsibility
|
| Access control |
Shared responsibility |
|
| Backup |
Customer or managed provider responsibility |
Customer or managed provider responsibility
|
| Network security |
Shared responsibility |
|
| Compliance |
Needs correct configuration |
Needs correct configuration and processes
|
Cloud and colocation for disaster recovery
Cloud and colocation can both support disaster recovery.
Cloud disaster recovery often will include:
- cloud backups
- replicated servers
- standby environments
- snapshots
- disaster recovery as a service
- rapid restore
- off-site storage
- automated failover
Colocation disaster recovery usually includes:
- secondary data centre
- backup hardware
- private connectivity
- replicated storage
- managed backup
- off-site failover
- secure equipment hosting
The right option depends on:
- recovery time objective
- recovery point objective
- budget
- application complexity
- data volume
- connectivity
- testing requirements
- support mode
Cloud and colocation for UK businesses
UK businesses should consider:
- where data is stored
- whether UK data centre location matters
- GDPR responsibilities
- sector requirements
- support hours
- data recovery process
- internet connectivity
- cyber security
- supplier contract terms
- backup retention
- migration plan
- exit strategy
- business continuity needs
- cloud cost governance
How to choose between cloud and colocation
Ask these questions:
- do we already own server hardware?
- do we want to keep owning hardware?
- do we need physical access to equipment?
- are our workloads predictable or variable?
- do we need fast scaling?
- do we have in-house IT expertise?
- do we need managed support?
- are we using Microsoft 365 or Azure?
- are we using AWS?
- do we need private cloud?
- do we need disaster recovery?
- do we need UK data centre hosting?
- do we need low-latency connectivity?
- do we need dedicated internet access?
- what are our backup requirements?
- what downtime can we tolerate?
- what compliance requirements apply?
- how will costs be monitored?
- what happens if we leave the provider?
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Common mistakes to avoid
Avoid these mistakes:
- choosing AWS or Azure without estimating actual usage
- comparing cloud and colocation as if they are the same thing
- assuming cloud is always cheaper
- assuming colocation is always cheaper long term
- ignoring data transfer costs
- ignoring power costs in colocation
- ignoring remote hands charges
- ignoring support plan costs
- forgetting backup and disaster recovery
- not checking who manages security
- not checking where data is stored
- overbuilding infrastructure
- underestimating migration work
- failing to monitor cloud spend
- keeping old servers running unnecessarily
- not planning an exit strategy
- choosing a provider based only on brand recognition
- not checking connectivity to cloud platforms
- ignoring contract length and renewal term
When cloud is the better choice
Cloud is usually better if:
- you do not want to own hardware
- workloads change regularly
- you need fast scalability
- you need development environments
- you use modern applications
- you need global infrastructure
- you want usage-based pricing
- you need easy backup options
- you want serverless or managed databases
- you use data, AI or analytics services
- you want to move away from office servers
When colocation is the better choice
Colocation is usually better if:
- you already own servers
- you need control over hardware
- you have predictable workloads
- you need data centre resilience
- you want to avoid hosting servers on-site
- you need low-latency connectivity
- you need carrier access
- you need private cloud
- your workloads are not easy to rewrite for cloud
- you have IT expertise to manage hardware
When hybrid cloud is the better choice
Hybrid cloud is usually better if:
- some workloads are cloud-ready and others are not
- you want to modernise gradually
- you use legacy applications
- you need disaster recovery
- you need cloud backup
- you have owned hardware
- you use Microsoft Azure or AWS alongside on-premise systems
- you want to combine colocation with cloud services
- you need both scalability and control
Our Final verdict
Cloud and colocation are both useful, but they suit different business needs.
- Cloud is usually best when you want scalability, flexibility and less hardware management.
- Colocation is usually best when you own servers and want secure data centre facilities, power, cooling and connectivity.
Hybrid cloud is often best when your business needs both.
We think that the best approach is to compare providers based on:
- workloads
- current hardware
- cloud readiness
- compliance needs
- support requirements
- data location
- uptime needs
- disaster recovery
- connectivity
- internal IT resource
- migration complexity
- cost control
- contract terms
Compare Cloud and Colocation Providers
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FAQs: cloud and colocation UK
What is the difference between cloud and colocation?
Cloud uses provider-owned infrastructure delivered over the internet. Colocation lets your business place its own servers in a third-party data centre.
What is cloud hosting?
Cloud hosting lets businesses rent computing resources such as servers, storage, databases and networking from a cloud provider.
What is colocation?
Colocation means renting space, power, cooling and connectivity in a data centre for your own servers and equipment.
Is cloud cheaper than colocation?
Cloud can be cheaper at the start because there is less hardware to buy, but usage costs can rise. Colocation can be cost-effective for predictable workloads if you already own hardware.
Is colocation cheaper than cloud?
Colocation can be cheaper for some predictable, long-term workloads, but it depends on hardware, power, bandwidth, support, maintenance and data centre costs.
What is hybrid cloud?
Hybrid cloud combines public cloud, private cloud, colocation or on-premise infrastructure in one overall IT strategy.
Who should use cloud hosting?
Cloud hosting suits businesses that want scalable, flexible infrastructure without owning and maintaining physical servers.
Who should use colocation?
Colocation suits businesses that own servers, need hardware control, want data centre resilience or have predictable infrastructure requirements.
What is managed cloud?
Managed cloud is where a provider helps design, migrate, monitor and support your cloud environment.
What is private cloud?
Private cloud is dedicated or controlled cloud infrastructure used by one organisation or a defined customer environment.
What is public cloud?
Public cloud is shared provider infrastructure used by many customers, with resources delivered on demand.
What are AWS and Azure?
AWS and Microsoft Azure are major public cloud platforms offering compute, storage, networking, databases and many other cloud services.
Is AWS better than Azure?
AWS may suit cloud-native and highly scalable workloads, while Azure often suits Microsoft-first businesses. The best option depends on applications, skills, licences and cost model.
What affects cloud costs?
Cloud costs are affected by compute, storage, data transfer, databases, backups, regions, support plans, licences and usage patterns.
What affects colocation costs?
Colocation costs are affected by rack space, power, cooling, bandwidth, cross-connects, remote hands, location, security and support.
Do cloud providers store data in the UK?
Some providers offer UK regions or UK data centre options, but you must check the specific service, configuration and contract.
Do colocation providers offer support?
Basic colocation usually includes facility support. Technical support, remote hands, managed firewall, backup or managed services may cost extra.
What is remote hands?
Remote hands is a data centre service where on-site engineers perform physical tasks such as rebooting, cabling or replacing hardware.
What is a cross-connect?
A cross-connect is a physical or logical connection between your equipment and another network, carrier, cloud provider or customer inside a data centre.
What is cloud connectivity?
Cloud connectivity provides direct, secure or optimised connections between your business network, data centre or colocation environment and cloud platforms.
How do I compare cloud and colocation providers?
Compare workloads, hardware ownership, support, security, uptime, data location, connectivity, disaster recovery, migration, contract terms and total monthly cost.
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James Ward is the CEO & Founder of Compare Your Business Costs — a UK-verified comparison platform helping SMEs save money on business broadband, leased lines, phone systems, mobile telecoms, managed services and IT support. With over 10 years of experience in telecoms and technology procurement, James is a trusted UK business expert featured in national media and verified on Companies House.
