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  1. #1
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    Dedicated vs Colocated question

    Hi guys!

    We're trying to figure out if we'll go for dedicated hosting or colocated.

    I would like to know what's the average difference in up-front and monthly costs for dedicated vs colocated? Many of you run businesses in this area, you must've done the math yourselves many times?

    I know it's hard without having the requirements for the hardware, but in general, you must have some kind of idea, for example,
    Dedicated : up-front costs : 10%, monthly costs 90%
    Colocated : up-front costs : 50%, monthly costs 50%

    Also I'm talking about total cost, meaning taking in consideration administration costs and maintenance, possible loss of business etc. I'm just trying to see the big picture, the bird's eye view of the thing, I'm sure some of you have done these calculations.

    Thanks!

  2. #2
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    Oh also one important detail, we're a startup company, and we would like to take in account the scenario that we go out of business in 2 years, and might have to liquidate / terminate our hosting contract.

    Of course that's all for planning's sake, we dont really hope it'll happen

  3. #3
    It's hard to believe this, but unless you're wanting a full rack, or already have a bunch of servers laying around, you're not going to save much of anything on the monthly by colocating.

    It's starting to get better now, and if you search around, you can find acceptions, but a few months ago after much searching, I couldn't find a colocation deal that was any cheaper than dedicated!

    So the answer is, you're (usually) just going to 'blow' the money you spend building your server.

    Good Luck!

  4. #4
    I should qualify that... I was looking for the cheapest way to get a server at that time... So if you're talking high end servers, it wouldn't be that way... BUT what you spend building a high end machine won't 'come back' for months, maybe a year.

    Hope that helped :/

  5. #5
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    dedi = low quality oversold

    A lot of places offer dedis real cheap with a ton of bw. I'm at one of the cheapest reasonable places and I'd have to oversell like 800 percent and not pay anything for servers. As it is, we do'nt oversell, and we get servers that SOUND good to customers for around 200 a piece. We're pushing our rack power to the limit (but never over =]) and I'd say we're one of the dedi providers at our dc that's not pushing it too far. Some guys stick machines in racks until they start having power problems and put their whole cabinet on a 100mbit drop. That's like 30 servers on 100mbit each with tons of bandwidth that can't even be realized.

    They can do this because people in the market for a dedi are easily excited by big numbers and will probably never push it. colo people tend to be a little more advanced so providers expect them to know what they need and to come closer to using what they buy.

    And another thing, like i said above, we get boxes that we can say are P4 with Hyper Threading, 512mb ram, 160 GB HDD for well under 300, and so can you if you shop bargain basement places that sell iffy stuff. We stress test everything and burn them in in the rack before we ever sell them, but i'm sure the HW is less reliable than anything you'd buy to colo.

    colo = better quality service, even from the same provider, imho.
    -- My software isn't buggy; it develops random features --

  6. #6
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    You see, and even though I still appreciate your input, that's not the debate I want to get into. Of course it's cheaper for YOU to go for colo. For us, we would have to hire an administrator, part time if we can (unlikely), full time most likely, and keep in mind we are launching our product and dont even have any revenues yet...

    And btw I'm not talking about reselling, we are just looking for hosting our application. I didnt mentioned that first, my bad :p

    Also I think you are overlooking the long term costs (maintenance, depreciation). I'm looking for figures for a 2 years time frame, let's pretend that everything stops after this (company goes bankrupt for example). What I would really appreaciate, if anybody has these figures, is a comparison for the two scenarios with numbers for both sides, preferrably unbiased.

    Anyhow, thanks still for trying

  7. #7
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    All depends on your product. If you are going to buy colo for only sell dedi, this doesn't seem a very profitable startup strategy, because of the large amount of upfront financing. And the profit margings for a startup beeng very low, you will definitely have hard times to survive.

    If the product is reseller and shared hosting plans, then it is better to go for dedi in the beginning. Judging from the colo pricess, one have to pay for BW almost the same one is paying nowadays for dedi, plus the hardware costs.

    Buying a colo is a long-term investment which is not justified in the hosting world with its full renovation cycles of 9 to 12 months. In other words, you can jump from one dedi to another dedi every year, while with the colos, you stick forever to the iron.

    IMO, colo is good for a mini DC with established customerbase.
    :: :: :: :: :: ::
    :: VDSP.Net :: Directory of virtual and dedi serv providers by location and price

  8. #8
    If the product is reseller and shared hosting plans, then it is better to go for dedi in the beginning. Judging from the colo pricess, one have to pay for BW almost the same one is paying nowadays for dedi, plus the hardware costs.
    I had the same thought like you but I was wrong... To the thread starter, if you have a good business plan, and some money upfront, go with colocation to save you money and headaches...
    P4HOST.COM -- Specialize in quality Web Hosting solutions.
    Affordable -- Prices are very comparative
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  9. #9
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    dont forget that its the same old budget providers you will have to choose from if you are looking for cheap like servermatrix, gnax, nocster etc etc with colo u have a whole huge new amount of networks and companies to be able to run on.... almost everyone here is a reseller of one of the big budget houses....

    if anything go colo and get some kind of new hosting company blood into the forums hehehe

  10. #10
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    All depends on what you need. If your setup is complx and such, then you just have to COLO>

  11. #11
    I think that in most situations dedicated hosting is more preferrable than colocation. The reason is quite simple: prices on dedicated hosting and colocation is quite equal, and when you'll upgrade your server dedicated server upgrade will be cheaper than colocation one.

  12. #12
    Originally posted by HQHost
    I think that in most situations dedicated hosting is more preferrable than colocation. The reason is quite simple: prices on dedicated hosting and colocation is quite equal, and when you'll upgrade your server dedicated server upgrade will be cheaper than colocation one.


    they are quite equal for the first year... but the second year and so on... you will see a big difference.
    P4HOST.COM -- Specialize in quality Web Hosting solutions.
    Affordable -- Prices are very comparative
    Reliable -- Very low load average guaranteed. 60 day money back. Fast Support --Support Forum -- Providing hosting since 2003

  13. #13
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    Guys, thanks very much for the input, but I dont know why people missed what I said previously. So here goes again :

    I'm not talking about reselling, I'm just looking for hosting our web application. We dont want to resell any hosting, and our product is simply a website Is it more clear now?

    So ok I realize my question is perhaps a little too vague, lets be more specific then. We're a startup company, have low cashflow, no revenue for now (that's the point to get the hosting, to start selling our product) and a potential risk of going out of business in 1 or 2 years (we never hope for that, but its part of good planning). We dont have the in-house expertise to do all the admin on those linux servers, although we have good basic knowledge. We might be looking for 2 or 3 machines to fulfill what we need to run (Tomcat, Apache, MySQL and a special database system called FastObjects). So, should we focus on dedicated or colocated?

    Thanks again, hope we get it right this time

  14. #14
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    Originally posted by inteltechs
    they are quite equal for the first year... but the second year and so on... you will see a big difference.
    I am not into colo yet, but somehow getting to feel this. I keep paying 250usd/month. It might be worthy for first year, but think

    machine cost-1000usd
    1MB line is something like 50usd/month, 600/year.

    I pay 250usd/month X12 for first year and second year and....

    very different

  15. #15
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    So ok I realize my question is perhaps a little too vague, lets be more specific then. We're a startup company, have low cashflow, no revenue for now (that's the point to get the hosting, to start selling our product) and a potential risk of going out of business in 1 or 2 years (we never hope for that, but its part of good planning). We dont have the in-house expertise to do all the admin on those linux servers, although we have good basic knowledge. We might be looking for 2 or 3 machines to fulfill what we need to run (Tomcat, Apache, MySQL and a special database system called FastObjects). So, should we focus on dedicated or colocated?
    I would say managed. Not kinda sometimes managed, but a real managed server. If you don't have in house techs, administration costs of professional experts will eat you alive when something breaks. Paying the extra money each month is kinda like buying insurance for when the big one hits. When it does (and it will eventually) it will pay for itself in tech time, down time, and saved reputation. Look for someone to proactivly monitor and respond to your machine, not a reactive service that you have to call in and request.

    I know some smarty pants will chime in and mention those budget management companys, and the free 'managed' services at some hosting companys. But in all reality, you do get what you pay for. If your serious about what you do, find a hosting company that is serious about what you need. A 'managed' server that includes updating the kernel and rebooting the machine is useless, and more than one 'managed' company does not have expert tech for advanced issues.

    As for costs, its highly depends on who you deal with. For us, right now colo is a lot cheaper because we don't stock 20,000 cheapo towers. Some companys oversell dedicated/managed and raise colo. It's a balancing act you can only play once you've picked a provider.
    managedway
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  16. #16
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    Thanks rsanders, that's pretty much what I was thinking. Many people seem to forget about what is called 'total cost of ownership'. Things always have hidden costs that many people forget about. Anyhow, the only small thing left is that it seems that packages that are 'fully managed' as opposed to many 'partly managed' (for example like you said kernel updates and reboots and monitoring) costs a whole lot more (at least that's the impression I got from the quotes I got in recently. On the other hand, I have yet to see one that offers a good in-between, either its full blown support or only really basic support (reactive like you qualified it).

    Do you still think I should aim at fully managed and forget about the bargain I might get or is it possible to find a reasonably featured package that will not bang too much on $$?

  17. #17
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    I don't think your going to find inbetween. You will more likely pay too much for false peace of mind.

    You can roll the dice, lease a cheapo tower from dell and colo it, and hope all goes well. Once you get rolling, then step up or even hire someone that can manage it. It is like insurance, if you think you can get it installed and running, odds are it will run for a good time before something serious happens. But hey, one time I totaled a week old car too, rear ended on the highway. Ya never know.
    managedway
    WE BUILD CLOUDS

    Cloud Computing | Fiber Optic Internet | Colocation

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