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  1. #1
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    Colo vs Renting a dedicated server

    I am currently renting almost 50 servers. Is it cheaper to colocate or rent a dedicated server in the long run?
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  2. #2
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    For the amount of 50 servers it would definitely be colo. You can get a nice Cabinet or 2x Cabinet at a great price.
    Last edited by net; 10-13-2013 at 10:33 AM.

  3. #3
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    You should better colocate it for that amount of servers. It will save you in a long rung.
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  4. #4
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    If you have the capital to invest in 50 servers, I don't see any problem.
    If there's no money available, then I suggest you keep on reselling

    What we see a lot is that customers start reselling us in the beginning and once they grow enough they move over to colocation.
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  5. #5
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    Can I just order a server online and have it shipped to my provider?

    Where do you usually buy your servers? What is the average price of an entry level server?
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  6. #6
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    Yes, you can do that. I recommend apaqdigital.com and look for Chong.
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  7. #7
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    Quote Originally Posted by net View Post
    Yes, you can do that. I recommend apaqdigital.com and look for Chong.
    Thanks bookmarking that site now

    I just checked some of the providers that accepts colocation and the prices in colocating is almost the same and sometimes even more expensive than the current servers I am renting.

    Most of the servers I am currently renting are just lowend servers ranging from atoms to Q66xx and i3 servers. For example I am renting a server that costs $99/month and at WebNX to colocate a single server costs $129.00/month.
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  8. #8
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    Budget Colo

    Quote Originally Posted by chukchuk View Post
    Thanks bookmarking that site now

    I just checked some of the providers that accepts colocation and the prices in colocating is almost the same and sometimes even more expensive than the current servers I am renting.

    Most of the servers I am currently renting are just lowend servers ranging from atoms to Q66xx and i3 servers. For example I am renting a server that costs $99/month and at WebNX to colocate a single server costs $129.00/month.
    Datashack or Dacentec or Fiberhub all have good budget colo.

    But single server colo most of the time isn't worth it. It becomes worth it when you buy whole cabs.
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  9. #9
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    I'd recommend reaching out to the some colo providers and presenting them with your dilemma. Most should be able to give you a clear picture of your costs both in the near and long term. Some things to consider:

    -Will you move all 50 servers from dedi to colo at once, or will you migrate over a period of time? (what's that period of time?)

    -What type of servers will you colo? This will dictate power and space needs. Are you planning to purchase the exact same servers you are renting, or something else?

    -Do you have the capability of managing the network and hardware that your dedi provider likely does for you? (switches, etc)

    -Will you need remote hands services, or other paid support. (this will factor into the cost).

    -How stable are the needs for the 50 servers, and the space they would consume in colo? To get the best colo price, you will likely need to commit to a contracted term.

    I hope some of this helps. Best of luck!
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  10. #10
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    Colo, and yes check out Fiberhub.

    And what TJ said.

  11. #11
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    Quote Originally Posted by TJ Waldorf View Post
    I'd recommend reaching out to the some colo providers and presenting them with your dilemma. Most should be able to give you a clear picture of your costs both in the near and long term. Some things to consider:

    -Will you move all 50 servers from dedi to colo at once, or will you migrate over a period of time? (what's that period of time?)

    -What type of servers will you colo? This will dictate power and space needs. Are you planning to purchase the exact same servers you are renting, or something else?

    -Do you have the capability of managing the network and hardware that your dedi provider likely does for you? (switches, etc)

    -Will you need remote hands services, or other paid support. (this will factor into the cost).

    -How stable are the needs for the 50 servers, and the space they would consume in colo? To get the best colo price, you will likely need to commit to a contracted term.

    I hope some of this helps. Best of luck!
    Thanks for posting some very important details.

    I thought the provider will still manage the network or that depends on the provider?
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  12. #12
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    Well after your cabinet's switch everything is the provider's responsibility.
    Best case scenario a good provider will also wire-up your cabinet and get it online. Probably there will be a fee though.

  13. #13
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    I wont be able to visit the datacenter so they would have to do everything

    Thanks everyone for the input. I'm probably going to colo some units to see if its better to colo or not for me.
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  14. #14
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    Quote Originally Posted by chukchuk View Post
    I wont be able to visit the datacenter so they would have to do everything
    We view this question in terms of internal resources, growth rate, strategy, sources of competitive advantage and perception of risk.


    > GROWTH RATE AND STRATEGY - Hiring people and change involves risk. Further, while many people treat these technologies and software as if they are plug and play, when you get into the colo world, you are talking about fixed infrastructure. The average tenant at a colo facility is there for over five years. In light of your current strategy and growth rate, is it worth saving 10 percent on your infrastructure operations? Many firms underestimate the true cost.

    > RESOURCES - If you already have competent resources for networking, sys-admin, facilities procurement, as well as the capital, colo can be the least-cost in the long term. 50 servers is still a modest footprint, so the transition should be done over time.

    Above are just a few of the items one may consider.

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    Last edited by writespeak; 11-05-2013 at 01:41 PM.

  15. #15
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    Quote Originally Posted by chukchuk View Post
    Thanks bookmarking that site now

    I just checked some of the providers that accepts colocation and the prices in colocating is almost the same and sometimes even more expensive than the current servers I am renting.

    Most of the servers I am currently renting are just lowend servers ranging from atoms to Q66xx and i3 servers. For example I am renting a server that costs $99/month and at WebNX to colocate a single server costs $129.00/month.
    If you would like to buy your own servers online and ship to providers. I suggest you check Supermicro, Tyan, Sans Digital... websites, they all have authorized distributor, integrator and reseller lists. Companies in the list have the best price, just provide the specification you need and ask them for a quote. If some servers you quote are on sale, that will definitely lower your cost in the long run.

    BTW, apaqdigital.com sells supermicro products, but can't find them in Supermicro's list. And their price seems high.

  16. #16
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    Single server co-lo can be quite expensive, but it is an economy of scale.

    Yes, you will need to buy the Hardware, have spares etc.

    If you have 50 servers then you will need 2 racks. Lets look at a the colo cost of a rack v's a single server (that you quoted). A rack will cost around 1K/mth or so ( including some power and some B/W ). Lets assume that the rack includes 20A and 1Gbit connection, so you could put a switch and 20 servers into that rack. Each server is now only costing you $50/mth for colo. There are also plenty of offers where you can get 40A of power, which would let you fill the rack (and halve the colo costs per server)

    Colo is about the economy of scale, and at 50 servers, over a year you will save a fair amount by owning them. The downside:

    Well, you will need 12K for colo costs for a year, and you will need ~80K for the 50 servers, so the up-front costs can be quite high.

    There is no need to start with a full rack, you might want to start with a 1/4 or even a 1/2, which is still cheaper than a single server colo.
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  17. #17
    Thanks everyone for the input. I'm probably going to colo some units to see if its better to colo or not for me.
    It's good to test it yourself. I believe you'll do good with it.

  18. #18
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    As others have said single colo is not worth it unless you only have one or two servers, a lot of times it's worth just using dedicated servers from other providers. It really comes down to how much you have to spend on it.
    If you're able to rent a full rack, find a provider you can buy some servers from that work for you it could be cheaper.
    If you can move all at once over a month that would be best however it would add up to a huge amount up front.
    There is a huge amount of options you can go with, also a lot of questions you should ask providers you might think about using.

    It always helps asking some providers and letting them know what you want and type of budget you have to work with. You might be able to have the provider buy the hardware pay for possibly part of that hardware and colocation and pay the rest off after a little time.
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    Migrate to Dell PowerEdge c6100 Servers!
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  20. #20
    Quote Originally Posted by chukchuk View Post
    Thanks bookmarking that site now

    I just checked some of the providers that accepts colocation and the prices in colocating is almost the same and sometimes even more expensive than the current servers I am renting.

    Most of the servers I am currently renting are just lowend servers ranging from atoms to Q66xx and i3 servers. For example I am renting a server that costs $99/month and at WebNX to colocate a single server costs $129.00/month.
    I would recommend you stick to leasing servers and shifting to better high end servers. For $99 you are seriously overpaying for Atoms and i3s. WebNX has many offers for $100-$150 with twice as powerful processors. Check the offers section. With Colo you have huge upfront costs.
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  21. #21
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    Quote Originally Posted by RRWH View Post
    Single server co-lo can be quite expensive, but it is an economy of scale.

    Yes, you will need to buy the Hardware, have spares etc.

    If you have 50 servers then you will need 2 racks. Lets look at a the colo cost of a rack v's a single server (that you quoted). A rack will cost around 1K/mth or so ( including some power and some B/W ). Lets assume that the rack includes 20A and 1Gbit connection, so you could put a switch and 20 servers into that rack. Each server is now only costing you $50/mth for colo. There are also plenty of offers where you can get 40A of power, which would let you fill the rack (and halve the colo costs per server)

    Colo is about the economy of scale, and at 50 servers, over a year you will save a fair amount by owning them. The downside:

    Well, you will need 12K for colo costs for a year, and you will need ~80K for the 50 servers, so the up-front costs can be quite high.

    There is no need to start with a full rack, you might want to start with a 1/4 or even a 1/2, which is still cheaper than a single server colo.
    Thanks for the figures youve given. 80K is really expensive
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  22. #22
    Quote Originally Posted by chukchuk View Post
    I am currently renting almost 50 servers. Is it cheaper to colocate or rent a dedicated server in the long run?
    There are a lot of factors at play here. Yes, it is cheaper to colocate in the long run. HOWEVER, if you are running a business that for whatever reason requires you to upgrade your systems frequently then maybe now. When you lease a server you can pretty much cancel at any time and upgrade to the latest and greatest technology for maybe a few bucks more each month. With colo you have to purchase all new hardware. With lease you can simply migrate your data from the old to the new and usually convince your data center to suspend the billing on the old for a few weeks while you complete the migration. With colo you cant migrate from the old to the new until you have purchased the new and set it up on the data center, meaning you are paying for more colo space as well as purchasing all new gear.

    How far is the data center from where you live? If you have to drive an hour or 2 every time a piece of hardware fails that adds up, time is money. Leased servers include hardware replacement in the monthly fee.

    These are just a couple of things to consider. There are plenty more. Check the blog post about this very question- https://blog.hivelocity.net/2011/05/...-old-question/

    Colocation can be a GREAT option and save a ton of money over the years. Just make sure you have thought it all out before you go out and spend tens of thousands of dollars on your own servers.
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  23. #23
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    You might want to consider the Capex expensive of colo and how this is going to effect your taxes. I would talk to a finance person before purchasing fifty servers. Remember servers are a depreciating asset. This purchase may effect your capital expenditure dramatically.

  24. #24
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    If you move to a colocation be careful with the remote hands in case you need.

    Also keep in mind about hardware issues you might have.

    Take care.

  25. #25
    Quote Originally Posted by Mdowdy View Post
    You might want to consider the Capex expensive of colo and how this is going to effect your taxes. I would talk to a finance person before purchasing fifty servers. Remember servers are a depreciating asset. This purchase may effect your capital expenditure dramatically.

    Likewise, you don't necessarily have to purchase outright. You can get a lease on hardware just like you can get a lease on your car. Equipment leases are accounted for differently than a purchase and it can work to your advantage tremendously, but again, a financial person is the one to discuss this with. Many leases can be done with a $1 buyout option so at the end you have tangible assets to your name -- which is a good thing.


    As for buying servers, we build our own systems, but you can find decent pricing on some supermicro systems from abmx.com (and quick turnaround times). They are also able to deal, so don't take their published rates at face value -- get in touch and see what they can offer.

  26. #26
    I would suggest Colo as well. It will be cheaper in the long run. Is a good idea to test some units before making a big commitment.
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  27. #27
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    Quote Originally Posted by HivelocityGM View Post
    There are a lot of factors at play here. Yes, it is cheaper to colocate in the long run. HOWEVER, if you are running a business that for whatever reason requires you to upgrade your systems frequently then maybe now. When you lease a server you can pretty much cancel at any time and upgrade to the latest and greatest technology for maybe a few bucks more each month. With colo you have to purchase all new hardware. With lease you can simply migrate your data from the old to the new and usually convince your data center to suspend the billing on the old for a few weeks while you complete the migration. With colo you cant migrate from the old to the new until you have purchased the new and set it up on the data center, meaning you are paying for more colo space as well as purchasing all new gear.

    How far is the data center from where you live? If you have to drive an hour or 2 every time a piece of hardware fails that adds up, time is money. Leased servers include hardware replacement in the monthly fee.

    These are just a couple of things to consider. There are plenty more. Check the blog post about this very question- https://blog.hivelocity.net/2011/05/...-old-question/

    Colocation can be a GREAT option and save a ton of money over the years. Just make sure you have thought it all out before you go out and spend tens of thousands of dollars on your own servers.
    I wont be upgrading the servers since our plan is to scale horizontally so that's another plus in colocating.

    But the thing is I am from Asia and I am going to colo in US would that be a major issue.
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