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  1. #1
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    Colo on the rise... Yes or No?

    A friend of mine told me about 6 months ago the trend of colocation was on the rise. I don't know if he mean't in our local area or in general.

    With everything going virtual these days it seems the demand for hosting boxes should be getting smaller. I realize you have to colo to provide virtual services, but still, what are your thoughts?

  2. #2
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    I have defiantly noticed colo is selling more and more over time, but its still no where near dedicated sales and really I don't think it ever will be.
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    I would say yes, but it seems people are virtualizing everything so sadly alot less of it.

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    Quote Originally Posted by ZanyHost View Post
    I have defiantly noticed colo is selling more and more over time, but its still no where near dedicated sales and really I don't think it ever will be.
    Technically, Colo is always selling more than server sales, just not on WHT. Big corporate companies are buying more and more colo by the day, despite the "economy" as it is, the rise for corporate co-location is on the rise and dedicated server sales are slumping.

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    Quote Originally Posted by BuzzServers-J View Post
    Technically, Colo is always selling more than server sales, just not on WHT. Big corporate companies are buying more and more colo by the day, despite the "economy" as it is, the rise for corporate co-location is on the rise and dedicated server sales are slumping.
    yes - that is correct.

    WHT is a boutique focused market - the much larger market is the corporate market and even larger than that is the small smb market.

    Its a completely different message though in the business market and they are picky as to who they are buying from in terms of established corporate look and feel of the supplier so the barriers to entry to selling in that market are a bit higher than selling in the highly technical market.
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  6. #6
    Interesting article about current trends in Colo & Hosting: Google "network world web-hosting" and read the first listing - very interesting.

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  7. #7
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    Well - it makes sense colo would rise. It's a much better fit. Think about it in a clients perspective: I need a new server for my forum, a quad core that will cost $125 a month with 8GB RAM, 1TB HD, Q9300. After 6 months, I would have spent $750. With $750, you can build that server. After 2 years, you'd have spent $3000, and the server is still owned by the datacenter. If you colo and pay $50/month (average 1U price) and build the $750 Q9300, after the first/second year you'll see profit coming out of your job. You are losing so much money by renting a dedicated server in the long run. Plus, the server is yours so if your forum closes down, you can either sell it (for about $500) or rent it out. Either way, you have a peice of equipment that is an asset.

  8. #8
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    Quote Originally Posted by Shikhir A View Post
    Well - it makes sense colo would rise. It's a much better fit. Think about it in a clients perspective: I need a new server for my forum, a quad core that will cost $125 a month with 8GB RAM, 1TB HD, Q9300. After 6 months, I would have spent $750. With $750, you can build that server. After 2 years, you'd have spent $3000, and the server is still owned by the datacenter. If you colo and pay $50/month (average 1U price) and build the $750 Q9300, after the first/second year you'll see profit coming out of your job. You are losing so much money by renting a dedicated server in the long run. Plus, the server is yours so if your forum closes down, you can either sell it (for about $500) or rent it out. Either way, you have a peice of equipment that is an asset.
    Yup that was my theory, why pay $200 a month for a server that you don't own when you could own the sucker, pay only $100 or less per month and win.

    So yes colo is on the rise and I'm taking part in that rise
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  9. #9
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    the trend towards colo is another reason you have seen more providers on the board roll out lease to own deals for servers to help bridge the gap btween the utility of the dedicated and the cost effectiveness long term of colo. Its an interesting transitory time in the market.
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    I just bought a Triple Core Phenom with 320GB Drive + 4GB RAM today for £300 and I'm putting it up in Manchester for £49/mo cost and it works out at £109/mo to lease, so I'm okay after a few months :d

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    Quote Originally Posted by sailor View Post
    the trend towards colo is another reason you have seen more providers on the board roll out lease to own deals for servers to help bridge the gap btween the utility of the dedicated and the cost effectiveness long term of colo. Its an interesting transitory time in the market.
    This is the easiest way for the DC to get rid of hardware when it becomes old (as the customer then owns it) but still be able to get the money back for it as if it were a new product. Better for the provider than the customer.

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    Quote Originally Posted by ganesh-rao View Post
    This is the easiest way for the DC to get rid of hardware when it becomes old (as the customer then owns it) but still be able to get the money back for it as if it were a new product. Better for the provider than the customer.

    What are you talking about?

    LTO of a brand new box out of the wrapping is old hardware??

    I think you either are very misinformed or have some other motive in that statement.
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  13. #13
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    Quote Originally Posted by coeplicltd View Post
    I would say yes, but it seems people are virtualizing everything so sadly alot less of it.
    I read this as, people need specific/better hardware to do virtualization with, which leads them to colocation naturally. I would say virtualization is helping the colo market when compared to what the equivalent dedicated server can run

  14. #14
    I have never really been a fan of colo.

    One thing that always freaked me out was hardware failures. With a dedicated server, they have all the parts waiting for you. However, if your servers crash, you gotta wait an extra few days just to get it back online.

    What about when you want to change data centers? Wouldn't you have to ship them and be down the entire time? I guess you could wait until an upgrade period, where you got your old servers and a set of new ones waiting for the data, but that just seems like an awful lot of work and thought and room for error.

    Not to mention, they usually charge a higher premium for colo bandwidth...
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  15. #15
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    Colo only starts to make sense if you have extravagant hardware requirements or if you have a good number of servers. For a handful of run-of-the-mill servers, dedicated hosting will always be more cost effective due to the economies of scale.

    With that said, the companies who are offering dedicated hosting services need data centre space from somewhere, and those without their own data centres are certainly co-locating somewhere.
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  16. #16
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    Quote Originally Posted by Shikhir A View Post
    Well - it makes sense colo would rise. It's a much better fit. Think about it in a clients perspective: I need a new server for my forum, a quad core that will cost $125 a month with 8GB RAM, 1TB HD, Q9300. After 6 months, I would have spent $750. With $750, you can build that server. After 2 years, you'd have spent $3000, and the server is still owned by the datacenter. If you colo and pay $50/month (average 1U price) and build the $750 Q9300, after the first/second year you'll see profit coming out of your job. You are losing so much money by renting a dedicated server in the long run. Plus, the server is yours so if your forum closes down, you can either sell it (for about $500) or rent it out. Either way, you have a peice of equipment that is an asset.
    The reality of the matter is that you're only looking at a single server's cost. What if your server breaks in the middle of the night? Do you have a spare? How much did the spare cost you? What's the labor involved in you driving to the DC and spending hours to fix it? Have you factored bandwidth costs? What about a backup UPS? Those mega ton UPSs look impressive sitting at the facility but you'd be surprised how often they fail.

    There are many more things that one needs to anticipate to stay afloat in this business. It does add up in the end.

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  17. #17
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    Quote Originally Posted by UNIXy View Post
    The reality of the matter is that you're only looking at a single server's cost. What if your server breaks in the middle of the night? Do you have a spare? How much did the spare cost you? What's the labor involved in you driving to the DC and spending hours to fix it? Have you factored bandwidth costs? What about a backup UPS? Those mega ton UPSs look impressive sitting at the facility but you'd be surprised how often they fail.

    There are many more things that one needs to anticipate to stay afloat in this business. It does add up in the end.

    Regards
    several options that are going on for this:

    if you are buying your hardware from the dc you are in - likely they are warrantying it and providing hands 24x7 for you

    if you are virutalized on vmware etc - just buy an extra box and let HA handle the movement and fix it whenever you care to - beautiful solution

    If you want backup ups you should buy b feed power because quite frankly I dont know anyone providing redundant power to dedicated servers offerings.
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    Quote Originally Posted by sailor View Post
    several options that are going on for this:

    if you are buying your hardware from the dc you are in - likely they are warrantying it and providing hands 24x7 for you

    if you are virutalized on vmware etc - just buy an extra box and let HA handle the movement and fix it whenever you care to - beautiful solution

    If you want backup ups you should buy b feed power because quite frankly I dont know anyone providing redundant power to dedicated servers offerings.
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  19. #19
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    Colo is definatley on the rise in the UK. Alot of the major players are building bigger DC's, more so out of London (although thats as much to do with power as anything.}
    Telehouse West is about 80% pre sold and its only a steel shell at the moment.

  20. #20
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    Quote Originally Posted by UNIXy View Post
    The reality of the matter is that you're only looking at a single server's cost. What if your server breaks in the middle of the night? Do you have a spare? How much did the spare cost you? What's the labor involved in you driving to the DC and spending hours to fix it? Have you factored bandwidth costs? What about a backup UPS? Those mega ton UPSs look impressive sitting at the facility but you'd be surprised how often they fail.

    There are many more things that one needs to anticipate to stay afloat in this business. It does add up in the end.

    Regards
    Support contract?

    Pretty much every major host other than Gator colocates either by the cabinet, in a cage/suite or owning their own facility. I think this speaks volumes... they've run the figures and realised the cost savings to be had in the long run by doing this.

    I think on a human level, it adds to the "seriousness" factor, particularly given that hosts appear and disappear on almost an hourly basis. If you have 4,5, 6 or even 7 figures invested in hardware, you are less likely to decide you want out one day and cancel the subscription of your dedicated.
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  21. #21
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    Quote Originally Posted by mdrussell View Post
    Support contract?

    Pretty much every major host other than Gator colocates either by the cabinet, in a cage/suite or owning their own facility. I think this speaks volumes... they've run the figures and realised the cost savings to be had in the long run by doing this.

    I think on a human level, it adds to the "seriousness" factor, particularly given that hosts appear and disappear on almost an hourly basis. If you have 4,5, 6 or even 7 figures invested in hardware, you are less likely to decide you want out one day and cancel the subscription of your dedicated.
    I don't understand why Gator don't do it to be honest. Is it just because they get dirt cheap from TP?

  22. #22
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    Quote Originally Posted by BuzzServers-J View Post
    I don't understand why Gator don't do it to be honest. Is it just because they get dirt cheap from TP?
    Could be several reasons.

    A. dirt cheap where its cheaper/or as cheap as buying their own equipment during the life of the hardware..
    B. no hardware responsibility
    C. no network responsibility
    d. no colo/power bills
    e. no staff to support the datacenter
    f. not bound to anything contractualy

  23. #23
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    Quote Originally Posted by Spudstr View Post
    Could be several reasons.

    A. dirt cheap where its cheaper/or as cheap as buying their own equipment during the life of the hardware..
    B. no hardware responsibility
    C. no network responsibility
    d. no colo/power bills
    e. no staff to support the datacenter
    f. not bound to anything contractualy
    scratch f from the list
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  24. #24
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    Quote Originally Posted by Jacob Wall View Post
    Softlayer providers redundant power to their dedicated servers.

    all their servers have redundant b feeds fed from a seperate UPS / Generator / Transformer?

    I am not aware that is correct. Maybe this is an option that you can buy for more money?
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  26. #26
    I have seen a huge rise in the colocation market, especially as others were saying above, in the enterprise space. People are recognizing the "economies of scale" as they add more hardware (prices getting cheaper) and as they want to build an infrastructure.

    You really can't separate colo from virtualization in some instances, because corporations are leasing colocation space, and putting blade enclosures in, running vmware, etc.

  27. #27
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    Quote Originally Posted by mdrussell View Post
    Support contract?

    Pretty much every major host other than Gator colocates either by the cabinet, in a cage/suite or owning their own facility. I think this speaks volumes... they've run the figures and realised the cost savings to be had in the long run by doing this.

    I think on a human level, it adds to the "seriousness" factor, particularly given that hosts appear and disappear on almost an hourly basis. If you have 4,5, 6 or even 7 figures invested in hardware, you are less likely to decide you want out one day and cancel the subscription of your dedicated.
    I believe he was referring to co-locating a single server vs dedicated hosting for the end customer. Obviously, any major host has more than one server.

    By the way, 10TB also uses 'dedicated hosting' as would any reseller of dedicated hosting, so co-location isn't the only option.
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  28. #28
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    The economy has actually brought a nice increase in colo business our way. It seems a lot of companies who used to run small in-house data centers, with say 2-10 cabinets are now seeing that it is more cost effective to have those things virtualized to take up less space and then to put them in a data center instead of having to manage all that infrastructure locally.
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  29. #29
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    Quote Originally Posted by sailor View Post
    all their servers have redundant b feeds fed from a seperate UPS / Generator / Transformer?

    I am not aware that is correct. Maybe this is an option that you can buy for more money?
    Yep, an option for more money: http://www.softlayer.com/servers_ded...1_details.html
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    Quote Originally Posted by KarlZimmer View Post
    The economy has actually brought a nice increase in colo business our way. It seems a lot of companies who used to run small in-house data centers, with say 2-10 cabinets are now seeing that it is more cost effective to have those things virtualized to take up less space and then to put them in a data center instead of having to manage all that infrastructure locally.
    Makes perfect sense if you think about it. Less stuff to manage, and virtualize makes them easier to manage.

  31. #31
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    There are many data centers which run a colo only operation.

    You look after the equipment and they'll look after the network.

    Given most give you 24/7 access to hardware and you can handle all software remotely, it's great.
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    I switched to colo back in March and never looking back. I had colo for years before August of last year when I attempted to move to dedicated with SoftLayer and had tons of trouble out of their black-box Supermicro machines and terrible Windows support. (Many swear by them, but I vow to never return.) Prior to that I always used Compaq/HP Proliant gear. I hooked up with GoRACK, bought myself some current generation HP equipment that's reliable, mailed it to Florida and have been able to sleep very comfortably ever since.

    Colo does not scare me at all. I know HP Proliant gear is solid, reliable and dependable and never gives me trouble. If it does, I have a support contract and access to overnight replaceable parts.

    I'm all good. You will too if you give it a try.

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  33. #33
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    Quote Originally Posted by ObjectZone View Post
    I switched to colo back in March and never looking back. I had colo for years before August of last year when I attempted to move to dedicated with SoftLayer and had tons of trouble out of their black-box Supermicro machines and terrible Windows support. (Many swear by them, but I vow to never return.)
    What kind of issues did you have? We have yet to have any Windows related issues with our Supermicro systems. Once in a great while an odd Linux driver issue or a FreeBSD issue, but not any Windows issues that I can recall.
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    I touched on this in another thread, but I believe it should always be on the rise. Leasing servers for us is not a cost effective long term solution. So the eventual colo and drop of leasing is inevitable for us. It's not that the providers we work with are bad, its that addon pricing is a joke. Forcing colo as a long term strategy for us.

  35. #35
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    Servers are becoming more reliable and more businesses are choosing to host their applications in data centers. We have noticed a strong rise in colo enquiries even though there is meant to be a recession?

  36. #36
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    Quote Originally Posted by KarlZimmer View Post
    What kind of issues did you have? We have yet to have any Windows related issues with our Supermicro systems. Once in a great while an odd Linux driver issue or a FreeBSD issue, but not any Windows issues that I can recall.
    I've posted about this in the past, so see if you can find something about it in my previous posts, however the problems are two pronged:

    1) Hardware has issues. My configuration was not low-end at all using a SAS RAID controller and 3 x 15k SAS hard drives. The drives continuously experience bus faults and at least once a week, one of the hard drives would fall out of the RAID set and force a complete rebuild once the controller saw that the drive was "back again". All drives in the set were replaced twice over. The controller, and I'm told, every other piece of hardware in the machine was completely replaced - still and nothing solved the problem. The only way we ultimately fixed it was by replacing the SAS drives with SATA models -- after that, all hardware seemed to run without fault, but at a serious degradation to performance. Their support reps were completely clueless as to why it was happening. I even got denials and had a finger pointed TO ME in their customer forums. This kind of treatment continued all the way up until my final call that I received from their retention agent, whom I gave the most professional verbal lashing I could. That person even agreed that I should not have been given such treatment and my concerns where fully founded. He claimed they would "work on making the process better."

    2) Secondly, their technical support is undertrained on Windows and to realize when they're dealing with another *trained professional* server administrator. I always provided in depth details on every case I submitted, but they consistently acted like it was "my fault" and they connected to the server and "fixed something" that was a complete non-issue. The resolution had nothing to do with my server or my configuration - the issue was usually network related! Their network engineers fixed the problem, but the tech took credit for "fixing your server". Completely ridiculous. I do not enjoy being pandered to with ridiculous resolutions -- I've been working with computers for 25 years and I did not receive answers to the actual problem, resolution, and what SoftLayer was doing internally to prevent those issues from occuring forever, and never again.

    Anyway, inexperienced users who don't demand accountability will probably be in very good hands at SoftLayer versus many of their competitors, however my customers demand extremely high levels of reliability nad we simply did not get the levels of support, respect, responsiveness and straight talk that we deserve from our datacenter. GoRACK hasn't once claimed problems were on my equipment when I tell them what's happening. They are ALWAYS willing to discuss the problem, and by the time I hang up the phone, the problem is solved - or solved very shortly. Perhaps it's more like this with colo customers, I don't know. Maybe they feel like you know your equipment better than they do when you're dealing with colo. If SoftLayer is the best there is in dedicated, then I never want to go back to dedicated ever again.

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    Quote Originally Posted by ObjectZone View Post
    I've posted about this in the past, so see if you can find something about it in my previous posts, however the problems are two pronged:

    1) Hardware has issues. My configuration was not low-end at all using a SAS RAID controller and 3 x 15k SAS hard drives. The drives continuously experience bus faults and at least once a week, one of the hard drives would fall out of the RAID set and force a complete rebuild once the controller saw that the drive was "back again". All drives in the set were replaced twice over. The controller, and I'm told, every other piece of hardware in the machine was completely replaced - still and nothing solved the problem. The only way we ultimately fixed it was by replacing the SAS drives with SATA models -- after that, all hardware seemed to run without fault, but at a serious degradation to performance. Their support reps were completely clueless as to why it was happening. I even got denials and had a finger pointed TO ME in their customer forums. This kind of treatment continued all the way up until my final call that I received from their retention agent, whom I gave the most professional verbal lashing I could. That person even agreed that I should not have been given such treatment and my concerns where fully founded. He claimed they would "work on making the process better."

    2) Secondly, their technical support is undertrained on Windows and to realize when they're dealing with another *trained professional* server administrator. I always provided in depth details on every case I submitted, but they consistently acted like it was "my fault" and they connected to the server and "fixed something" that was a complete non-issue. The resolution had nothing to do with my server or my configuration - the issue was usually network related! Their network engineers fixed the problem, but the tech took credit for "fixing your server". Completely ridiculous. I do not enjoy being pandered to with ridiculous resolutions -- I've been working with computers for 25 years and I did not receive answers to the actual problem, resolution, and what SoftLayer was doing internally to prevent those issues from occuring forever, and never again.

    Anyway, inexperienced users who don't demand accountability will probably be in very good hands at SoftLayer versus many of their competitors, however my customers demand extremely high levels of reliability nad we simply did not get the levels of support, respect, responsiveness and straight talk that we deserve from our datacenter. GoRACK hasn't once claimed problems were on my equipment when I tell them what's happening. They are ALWAYS willing to discuss the problem, and by the time I hang up the phone, the problem is solved - or solved very shortly. Perhaps it's more like this with colo customers, I don't know. Maybe they feel like you know your equipment better than they do when you're dealing with colo. If SoftLayer is the best there is in dedicated, then I never want to go back to dedicated ever again.

    --Chris
    I myself had issues with Softlayer and their windows support on both my old server with them and a personal friend's server. I believe they were provisioning windows servers with an older nic driver causing some issues on their xeon 3220 systems. I'm glad you like GoRACK, I was considering colocating there but ultimately decided against it due to their geographic location.

  38. #38
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    829
    Based on limited research I would be willing to say yes. It's cheaper to build a kick ass machine and colo it then to pay for a dedicated server equivalent to said kick ass machine.

    I put together a server for kicks on tigerdirect. Was a dual quad core I7 machine with 8GB of ram (can support 24GB) 8 1TB drives (2 hardware raid 1 for OS, would use MD software raid for rest). Came up to about 3k to build it. I don't even want to imagine the price per month to lease that. Probably over 1k per month, so after 3 months, you paid for the server!

    My next server will most likely be collocated for this reason. I can custom build as powerful as I want without influencing the monthly price. Liquidweb seems to have the best prices out of what I search but it was only a very quick search so it could be debatable. They will take tower or rack servers which is nice as it's cheaper to build a tower.

  39. #39
    Join Date
    Jan 2009
    Posts
    3,876
    3 x 12GB (3 x 4GB) 240-Pin DDR3 SDRAM Server Memory
    2 x Intel Xeon E5520 2.26GHz LGA 1366 80W Quad-Core Server Processor
    4 x Seagate Barracuda 7200.12 1TB 3.5" SATA 3.0Gb/s
    1 x ASUS RS520-E6/RS8 2U Barebone Server

    In short this is about $3,400 and has the following.
    2TB RAID-10 Storage
    32GB DDR3 RAM
    Dual Quad Core Xeon's @ 2.26GHz

    A similarly equipped server from a dedicated provider is a joke. Well over $1,000 dollars for a box like this. I can build it myself, have it managed with ANY company I choose. And it comes out cheaper in the long run even with the cost of colo/power/bandwidth/etc.

  40. #40
    Join Date
    Jan 2005
    Location
    Minneapolis, MN
    Posts
    967
    We switched to colo once we had about enough servers to fill a rack that we were leasing. We wanted to beef up our shared servers at the same time as well. Leasing those servers would run over $700 at most of the bigger name providers, while we can buy for $2000-$2500. The bandwidth/space/power costs are negligible compared to what we'd be spending on the lease.
    Doyle Lewis
    BuyHTTP Internet Services - In business since 2003
    Business Hosting | nginx, CloudLinux, Varnish cache, and CDP with every business account
    Shared, Reseller, Semi Dedicated, VPS, Cloud, Dedicated - We can grow with you

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