Hello!
Colocation is nothing but the dedicated IT infrastructure that is housed in others infrastructure. where a Cloud is a shared environment, now the data security is a different aspect all-together. But you don't have the ownership of the hardware used for making the cloud which indeed is not the case with Colo.
As a matter of fact businesses have indeed started to consider Cloud Hosting packages due to the scalability it offers, but for those organizations which have invested in bye of their own hardware, choosing any other solution would be a waste of their investment.
