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  1. #1
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    Why is colocation more expensive then getting a server.

    I've been shopping for colocation (1U) in South Florida and the prices I've been getting were much higher then if I would just lease a server at a datacenter. I thought you could save alot of money since you are only leasing space and bandwith. Somebody please tell me why it costs more. What am I missing?
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  2. #2
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    Florida colo is expensive from what I've heard. You can usually get a 1U space for about $50-$75/mo if you shop around.

  3. #3
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    Quote Originally Posted by JixHost View Post
    I've been shopping for colocation (1U) in South Florida and the prices I've been getting were much higher then if I would just lease a server at a datacenter. I thought you could save alot of money since you are only leasing space and bandwith. Somebody please tell me why it costs more. What am I missing?

    I use a place in lauderdale called 1vaultnetworks.
    They host the counties servers too.

    I pay 150 for a 1u and that includes a 1mpbs direct line through their router to the net...protected shared cabinet.

    the next step up, and cheapest, is to get a half rack..most will run 450 to 500 down here. Should include some good bandwidth too.

    The Nap down in miami will lease you out a whole rack for 1200 a month and it is the NAP>...

    I pay a little more per month (about 20 bucks) then I did for my dedicated..only I now have 10 times the computer and no downtime as I lease direct from the datacenter. Never had any downtime at all...

    I disagree..I think colo is cheaper in many aspects and you have a better computer 100% of the time.

    there is datavault or something like that in miami.

    there is also one in boca.... bocahost? or something like that...i forgot the name.
    They seemed okay but would only sell 1/2 rack minnimum.

    All the others wanted half rack or more except 1vaultnetworks.
    Reseller is always an option....but it kinda negates the whole reason for doing colo

  4. #4
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    Colocation normally makes sense when you are looking at multiple machines, or 1-2 high end hardware spec.

  5. #5
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  6. #6
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    With dedicated, they have many things under their control -- server form factor, hardware replacements, etc. They can also ensure that you are paying 'enough' for a super-powerful server that can completely saturate your link.

    With colo, they have to install your server in a rack full of mismatched machines (ie - hard cabling, etc), handle hardware swaps for you (ie - you ship a drive or mb to them, they replace it), etc, etc.. a bit more overhead.

    Just my two cents.. I also wish they would offer the same deals for colo as they do for dedicated.

  7. #7
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    Quote Originally Posted by JixHost View Post
    I've been shopping for colocation (1U) in South Florida and the prices I've been getting were much higher then if I would just lease a server at a datacenter. I thought you could save alot of money since you are only leasing space and bandwith. Somebody please tell me why it costs more. What am I missing?
    I was thinking the same thing. Once you finally do find a a good 1U price, they only throw in only 5mbps of transfer speed, which you can't do anything with.

  8. #8
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    There are plenty of colos that include 2000GB transfer or more for around $100-$150. Its pretty common to be able to find that. You just won't find sub $100 normally and nor should you in a proper DC that has to deal with non-standardized colo equipment.

  9. #9
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    I agree with the OP.

    I have four servers which require about 6TB each. I can get dual quad core servers for less than $200/mo. each that include 10TB of transfer. I haven't yet found a decent colocation offer that is more affordable, even if you don't include the cost of the servers!

  10. #10
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    A dual quad for less than $200? Are you sure you don't mean a single CPU quad?
    Looking for heavily oversold deals like 10TB for $199 isn't a fair comparison as you are not likely to find 10TB for less than that due to the cost of the bandwidth itself. Colo providers are also typically not in tune or capable of keeping up with the overselling that high volume, super budget hosts do.

  11. #11
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    Well see this is my personal thought here, colocation is pricy because they lose money. All the servers they have at the DC they make tons of money because they own the machine, the server you send they have to be able to make a little bit of money and not rob you blind, because your not renting there servers your just renting there facility (space, net, etc)

    It's good to have your own machine, I know unless you have like 3-10 rackmounts its not really worth it, the more you have there the less you pay if your renting your stuff out. You could always colocate and rent that machine out and then add another rackmount and rent that out, and another one just for your self your third one should pay for its self if you have a few quad core rackmount servers priced at $200+

    I suggest if your looking for a colo in South Florida just find one close to it colo there and then start moving to South Florida as you gain clients.

    Just my 2cents on this!
    Jason

  12. #12
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    Quote Originally Posted by CGotzmann View Post
    A dual quad for less than $200? Are you sure you don't mean a single CPU quad?
    Looking for heavily oversold deals like 10TB for $199 isn't a fair comparison as you are not likely to find 10TB for less than that due to the cost of the bandwidth itself. Colo providers are also typically not in tune or capable of keeping up with the overselling that high volume, super budget hosts do.
    I do know what hardware I use

    What is it that's not fair? I posted exactly what I'm doing instead of colocation.

    And yes, with a setup fee I can get dual quad cores at NetDepot for < $200. Heavily oversold? I'll bet sailor would disagree.
    Last edited by JG; 10-07-2009 at 03:56 AM.

  13. #13
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    Quote Originally Posted by ghettoc401 View Post
    I was thinking the same thing. Once you finally do find a a good 1U price, they only throw in only 5mbps of transfer speed, which you can't do anything with.
    5Mbps is a pretty good amount for a 1U web server. Unless you transfer more than 1TB per month, which most people do not, then 5Mbps is more than enough.
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  14. #14
    There are different costs associated with colocation than there are with a dedicated server. Here's just a few examples.

    1) Colocation allows the customer to visit their server, perform upgrades to it, etc. This usually means hiring on 24hr security staff specifically for allowing the customer access to their server, an added cost.

    2) Providers will often supply vehicle parking to colocation customers so they can more easily move their equipment in. Another added cost

    3) For us, we custom-built our cabinets for our dedicated server customers. It's much more efficient for technician access and was a lot cheaper than buying regular colo racks. I suspect a number of dedicated server providers use (or made) their own server racks.

    4) Colo racks are put into place with much more electrical power capacity available to them to ensure there's always enough power to the rack. Dedicated server providers don't need to worry about this as much because they can usually determine how much electricity they need up front.

    5) Colocation equipment needs to be hooked up prior to the client coming in. That's an upfront cost to the provider. With dedicated, you can basically build-out the cabling etc as the customer comes onboard.

    Just a few reasons why colocation can be more expensive than dedicated. There's plenty more.

  15. #15
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    Quote Originally Posted by JG View Post
    I do know what hardware I use

    What is it that's not fair? I posted exactly what I'm doing instead of colocation.

    And yes, with a setup fee I can get dual quad cores at NetDepot for < $200. Heavily oversold? I'll bet sailor would disagree.
    Leaving out the fact of a setup fee is a pretty big 'oops' when you mention your monthly price. Of course with a setup fee you could get it down that low.

  16. #16
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    I disagree.

    Show me how I can save money purchasing and colocating dual quad core (5520) machines that need 6TB of transfer. I'd love to see it (and do it!)

    This thread is about comparing colocation and dedicated servers, I didn't think a $500 setup fee, compared to actually purchasing the server (triple that cost) was worth mentioning, when I had already left the purchase price of the server out of the equation.

  17. #17
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    you can rent a 42u rack for 1000 bucks or less nowadays...
    mbps is not that expensive if you buy a lot of it.

    you can rent out half that rack and your colo will cost you nothing.


    I think there is a huge difference between colo directly with a datacenter and colo with a reseller/host.
    If you are going with a host out of your area, you might as well go dedicated since there is little difference and probably will cost you more for hands on stuff via colo.

    However, with direct from datacenter you are assured of you internet connection and actual unshared speed. If it is local it costs you nothing to repair the computer and no monthly cost to upgrade..etc.

    It all comes down to a few things for me...

    1) distance - if the server is far away, it will cost a lot to fix and downtime can be significant

    2) shared connections - unless you get your own dedicated line to your computer...you are sharing a load with others. I do not care what your reseller says about how much you can do, if it is shared you will find some big surprises during certain times you will not like.

    3) Sys admin - unless you are good at it and can fix things yourself you are asking for trouble colo-ing by yourself. There is no one to call in the middle of the night.

    If close and can sys admin, there is no reason to find a good datacenter and pay some bucks for a 1u...in my opinion.

    I would rather my computer fail due to my ineptitude then find my host out of business one day and my server gone. Or find the cheap hardware the host uses fails a lot.
    Or the shared connection has a ton of spammers slowing my site down.
    Etc.....

  18. #18
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    Current cost comparison over a one year period for me would be.

    Full 42U Cabinet w/ 100Mbps Dedicated Line and enough power to fuel 41 Servers and a Cisco 48 Port 3500 series switch.
    $2,000/mo~ Depending on location.

    41 Servers + Switch = $21,000~

    One time for colo:
    Servers + Switch = $21,000~
    Setup fee = $500~
    Spare parts = $2000~ just in case

    Recurring monthly fees for colo:
    Cab + Power + 100Mbps = $2000/mo~
    Lets say $500/mo~ for remote hands just in case.

    I'm throwing these extra things in there assuming things will go wrong so this is as realistic as possible.

    Back to the #'s $$$
    I spec'd out some servers, nothing too fancy, Dual Core, 4GB RAM, 250GB SATA at about $6100/mo this can vary from provider to provider but just go with me on this one.

    Rented Gear:
    $6100/mo x 12 = $73,200

    Colo Gear:
    $23,500 up front
    $2500/mo x 12 = $30,000
    So we have $30,000 + $23,500 = $53,500

    So your ROI is about 9 months, after 9 months your profit margins are vastly larger from the recovery of the intial buy in vs rented gear. So colo is cheaper, but usually best if you are working on a larger scale, say ten servers or more.

    I'm out of time, but small scale is great for rented gear. That and you mess with things less, depends on how much you want to do.

    There is a lot more to it, but I will end on that note, im tired of typing.

    EDIT: forgot to specify 100Mbps commit on a 1G line. Thats another thing, you can get fiber to your cab also. But there's a setup fee for those as well.
    Last edited by MikeTrike; 10-07-2009 at 03:51 PM.

  19. #19
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    $6100 a month for a dual core with 4gb ram? I don't think i've ever seen anyone charge anywhere near that....

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  21. #21
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    Quote Originally Posted by CGotzmann View Post
    $6100 is for 41 servers...
    Bingo, 41

  22. #22
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    Quote Originally Posted by phillu View Post
    $6100 a month for a dual core with 4gb ram? I don't think i've ever seen anyone charge anywhere near that....
    41 of them, I jumped into a scaled and detailed comparison.

  23. #23
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    heh, makes sense, I should probably not post on here at 3:30am, it's obviously my idiot time of day

  24. #24
    I was googling "colocation expensive" to see if anyone's question on this has been answered. At first glance it appears to have been answered here but it hasn't really. MikeTrike's example (correct me if I'm wrong), is for having 41 servers use ONE 100 Mbit port. I can rent a quad core 5520 server with 6 gigs ddr3 and 6TB monthly bandwidth for 200 a month, with each having it's own 100 Mbit port. 41 times 6 TB is 246TB a month, versus the 31 TB max with the colo option.

    Colo, as far as I'm understanding it, doesn't make sense for people that need large amounts of bandwidth, such as a GSP does, which is my case. I can fully saturate a 100 Mbit port with a high end quad core system with game servers alone. How could I ever use 41 servers on just one of those ports? Or am I missing something? Was the example for each server having it's own 100 Mbit port?

    One fully populated 64 slot BF2 server consumes 8 Mbits. With 6TB a month I would have to run roughly 2 and a half fully populated 24/7 (wouldn't happen) to meet my bandwidth limit. Most servers are only populated 1/3 of the day so I can host more, and simultaneous bandwidth consumption isn't an issue because the server has a 100 Mbit port.

    See attachment. BTW, the server instance is only using 300 MB ram, the rest of that memory usage is for other things.

    So after reading my post can anyone show me that colo would save me money in my situation?
    Attached Thumbnails Attached Thumbnails bf264.png  

  25. #25
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    Quote Originally Posted by JakkFrosted View Post
    I was googling "colocation expensive" to see if anyone's question on this has been answered. At first glance it appears to have been answered here but it hasn't really. MikeTrike's example (correct me if I'm wrong), is for having 41 servers use ONE 100 Mbit port. I can rent a quad core 5520 server with 6 gigs ddr3 and 6TB monthly bandwidth for 200 a month, with each having it's own 100 Mbit port. 41 times 6 TB is 246TB a month, versus the 31 TB max with the colo option.

    Colo, as far as I'm understanding it, doesn't make sense for people that need large amounts of bandwidth, such as a GSP does, which is my case. I can fully saturate a 100 Mbit port with a high end quad core system with game servers alone. How could I ever use 41 servers on just one of those ports? Or am I missing something? Was the example for each server having it's own 100 Mbit port?

    One fully populated 64 slot BF2 server consumes 8 Mbits. With 6TB a month I would have to run roughly 2 and a half fully populated 24/7 (wouldn't happen) to meet my bandwidth limit. Most servers are only populated 1/3 of the day so I can host more, and simultaneous bandwidth consumption isn't an issue because the server has a 100 Mbit port.

    See attachment. BTW, the server instance is only using 300 MB ram, the rest of that memory usage is for other things.

    So after reading my post can anyone show me that colo would save me money in my situation?
    The price differential, as stated by Mike, is $20 000 for 100mbit.
    If you choose a cheaper carrier, you can hit as low as $1-2 per mbit at 1000mbit commits (eg. HE).
    Which means, at $1000 per month * 12 = $12 000, you can get a dedicated gigabit and still work out cheaper for the year (though your ROI will extend by 2-3 months).
    A gigabit pipe maxed 24/7 is 330TB, far higher than 240TB.

    Part of the reason why dedicated servers have dropped so much is also because of increased competition.
    Colocation has not been affected by this sharp downward pressure, at least not to the same extent.

  26. #26
    I see, so if I get big, real big, then colo seems like a good option, especially considering I'll own the hardware.

  27. #27
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    Depends on the location. I myself went colo with a server and will be rolling out with more in colo

    It's way cheaper than dedicated the higher you go with it. Also worth to note that more servers you have the more you might save too per server.

    Example:
    Xeon X3460
    8 GB ram
    4 x 500 GB SATA II + HW RAID 10
    100mbps port
    we'll say about 2TB bandwidth (3-4mbps commit)

    Costs about $300+ from what I'm seeing lately VS $130ish a month + one time cost of $2k (includes spare equipment if necessary like spare drives, etc)

    130 x 12 = 1560 + 2k starting costs = $3560
    VS 300 x 12 = 3600

    The equipment pays for itself in about a year.
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  28. #28
    What I also like about colo is sharing bandwidth across servers. If I have 2 servers, each having 6 TB monthly and one uses 7 TB and the other uses 3 I'll end up paying overages, with colo all the servers on the rack share the limit - I like this. I can't wait till I'm big enough for colo.

  29. #29
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    Way to go! Keep reviving dead threads! woohoo!

  30. #30
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    Quote Originally Posted by MikeTrike View Post
    Way to go! Keep reviving dead threads! woohoo!
    Hey atleast he's got some numbers already down on this thread he can refer to. I guess this thread is ok to continue on.

    Well when comparing prices for colo, you dont pick the mostly costliest place around the block that sells bandwidth at $45/mbps

    Try this : http://uberbandwidth.com/pricing.asp

    There are other places like that you can find that dont have to burn your pocket.

  31. #31
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    I'll build on this one a little more based on a three year life cycle. Assuming all monthly costs stay the same. They will fluctuate, but probably not to any crazy extent.

    (recalculating these numbers based on cost I can get and would use) I am also not counting software licenses in this, i.e. cpanel/da/etc...

    1000MB bandwidth (1TB) on a 100Mbps port, roughly about 3Mb/s usage on 95th percentile.

    I also tweaked up the spec's a bit:
    Supermicro SYS-6016T-MTLF 1U
    4 x WD Black 500GB
    Adaptec 2405 (RAID10)
    6GB DDR3 1333 ECC (3 x 2GB)
    Intel E5520 2.26GHz Quad Core

    Colocation:
    $75 x 12 = $900 + $1800 | first year costs = $2,700

    versus

    Similar box from SL:
    $472 x 12 = $5,664
    Similar box from SH:
    $494 x 12 = $5,808

    Puts my ROI at about six months, more or less.

    Now there are cheaper dedicated providers, but I pulled base pricing from fairly solid providers. I'm sure you can find similar boxes for half the money, putting your ROI at about twelve months vs. my six months.

    So in short:
    Tree year cost for colo: $4,500 (assuming no remote or hardware issues, make sure you account for that, even if you put it at $500/yr thats still only $6,000 for three years)

    Three year cost for dedi: $17,208 (about half if you go with a value provider) But still considerably more than $4,500-$6,000.

    It all depends on skill/knowledge, budget and how much you actually want to be responsible for. You could end up building a garbage server if you do it yourself and are not familiar with proper configurations and procedures. Thus costing you the same, plus many headaches you otherwise would not have had.
    Last edited by MikeTrike; 04-01-2010 at 11:13 AM.

  32. #32
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    To the op:

    It doesn't matter where you go in the world. I've never found a place that offers colocation cheaper than dedicated servers. At least not in the long run. There are places like ubiquity that offer lower prices. However; If you consume a decent amount of bandwidth you will easily pay more than you would for their 199$ 5520 w/ 6TB included. They were quoting me 15$/mbit at a 25mbit commit. Which is like 10x more expensive than the bandwidth included with their dedicated servers. I've done all the research before, your best bet is to stick with dedicated servers unless you have some super special requirement for which you'll need your own hardware. In the end, after bandwidth, ip addresses, etc, you'll end up paying the same amount as you do for a dedicated server. Not to mention, you don't have to worry about hardware replacement with dedicated servers!

    Swiftway is another good example. They had a promo 'pay 600$ and then only pay for colo/bandwidth and after 18 months the server is yours'. Problem is, they offer pretty much the exact same server for the same monthly price as I would pay if I 'bought' the box. So, why would I want to give them an extra 600$ so that I can pay the same monthly fee? Then ontop of that have to pay more for problems, replacement hardware, etc. It's just illogical.

    The whole colocation market pretty stupid IMO. Unless you're ok with ROI >= 3 years (your hardware will probably be dead or at minimum extremely outdated by then.. Or not powerful enough to keep up with 3 years of growth so you'd end up buying a new server before this period).
    Last edited by sensel; 04-01-2010 at 09:12 PM.

  33. #33
    I'm hosted with ubiquity, they had the best locations, hardware and pricing combination. I just recently found AYK Solutions and they offer even better deals. I can get a Q9400, 8 gigs of ram, 2 1.5 TB drives AND a 100 Mbit unmetered connection for $299. I'm definitely getting my next box with them. Also a good point senselt, free hardware replacement.

    But as linuxissues pointed, colo bandwidth can be as low as $1 with 1000 Mbit commits.

    But I have noticed the cheaper the prices the worse the location, like I can get crazy deals in Ohio, but who wants game servers in Ohio. I made one conclusion for sure, when I get into selling web hosting colo is the better option, because a highly customized web server setup would be costly and location isn't critical. I can build a quad, quad core opty box with 32 gigs of ram and a bunch of 15k SAS drives with a nice raid card fairly cheap and for web hosting alone 20 Mbits would be fine for a slew of normal sites. I'm considering going into the ULTRA budget web hosting biz, that one box could hold a lot of clients.

    Here's some cheap colo I just found: uberbandwidth.com

  34. #34
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    Quote Originally Posted by senselt View Post
    Swiftway is another good example. They had a promo 'pay 600$ and then only pay for colo/bandwidth and after 18 months the server is yours'. Problem is, they offer pretty much the exact same server for the same monthly price as I would pay if I 'bought' the box.
    Yes and no. That Swiftway offer is specifically interesting for clients who want very high end servers (since with the buy once, we also so custom setups in the very extreme) and a lot of bandwidth.
    I do agree, that if you do not need a powerfull server and/or a lot of bandwidth then that specific offer is not very attractive for you.
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  35. #35
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    Co-location can't be automated in the same way dedicated hosting can be.
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  36. #36
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    I just figured I'd throw this out there --

    Host.Net has facilities in Delray Beach, Boca Raton, and Fort Lauderdale at the moment. Host.Net only goes 1/4, 1/2, full, cage, and suite however.

    Peer1 is down in Miami. They do 1/8, 1/4, 1/2, full, cage, and suite.

    The Peer1 pricing is better, but Host.net has the best facilities in South Florida, hands down. Their Boca facility is very, very nice.

    <<snipped>>
    Last edited by bear; 04-02-2010 at 07:38 AM.
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  37. #37
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    Quote Originally Posted by dazmanultra View Post
    Co-location can't be automated in the same way dedicated hosting can be.
    Really? Then how do the dedicated providers do it?

  38. #38
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    Quote Originally Posted by MikeTrike View Post
    Really? Then how do the dedicated providers do it?
    Are you asking how dedicated providers automate their services?

    Fundamentally it comes down to providing a service that requires as little human intervention as possible. This means having a panel for OS reloads, KVM/console access, reboots and the like.

    With co-location, this level of automation just isn't possible, and as such because of the increased staff overhead, it means that in many cases, co-locating a low-end 1U server will not save you any money versus renting a similar specification from a dedicated hosting provider.
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  39. #39
    Quote Originally Posted by JG View Post
    I disagree.

    Show me how I can save money purchasing and colocating dual quad core (5520) machines that need 6TB of transfer. I'd love to see it (and do it!)

    This thread is about comparing colocation and dedicated servers, I didn't think a $500 setup fee, compared to actually purchasing the server (triple that cost) was worth mentioning, when I had already left the purchase price of the server out of the equation.
    If you don't understand how that's relevant, I don't know how we can explain it to you

    A $500 setup fee will allow the host to shave off $100-$200 / mo on the monthly price. This is especially true with a high end server, where the provider doesn't know if they'll quickly be able to find another customer for it if you cancel.

    So a more fair comparison would be to say the rental price (without a setup fee) versus the colo price. Or you could disclose that you paid a $500 setup fee towards hardware that would otherwise have cost you $1500, that's fine too.
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  40. #40
    Join Date
    Dec 2006
    Posts
    4,149
    Quote Originally Posted by dazmanultra View Post
    Are you asking how dedicated providers automate their services?

    Fundamentally it comes down to providing a service that requires as little human intervention as possible. This means having a panel for OS reloads, KVM/console access, reboots and the like.

    With co-location, this level of automation just isn't possible, and as such because of the increased staff overhead, it means that in many cases, co-locating a low-end 1U server will not save you any money versus renting a similar specification from a dedicated hosting provider.
    Those are often premium hosts which makes colo even cheaper in comparison (at a nearby facility, not with them directly) in comparison.

    Colo also gives you access to your own server (physical), which may prove to be valuable as you have control over any hardware changes you wish to make (time, available options, cost-pricing).

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