Dedicated Servers Versus Collocation? Must Read

Dedicated Servers vs. Collocation
The most common factors businesses must evaluate between dedicated servers and collocation are:

  • In-house technical expertise
  • Proximity of data center
  • Are managed services available
  • Can the data center manage Microsoft Exchange Server (if you need that)
  • Are monitoring services available
  • What about backups and disaster recovery –
  • Cost of power – is 120 and 208v and 20 and 30A available?
  • Type of bandwidth offered (BGP/Cogent)? What type of failover is available?
  • Flexibility to upgrade and scalability factors
  • Entry cost
  • SLA (Service Level Agreement)
  • Terms of Service
  • Current reviews of each
  • Capital Asset Expense

Of course there are pros and cons to each plan, and neither may be the perfect solution for your requirements. Most web hosting providers will work to customize a solution that matches your requirements.

Collocation Pro’s:

  • If you’re in close geographical proximity to the data center, you can work on your own equipment (upgrades, etc.) avoiding the cost of outsourced parts and labor.
  • As you grow, savings from collocation grow as well
  • It’s still your equipment, so it’s easier to migrate to another provider should problems arise.
  • As a rule, it’s generally less expensive when compared to unmanaged dedicated
  • Your fixed assets show on your balance sheet, indicating higher net worth (important to banks and potential customers).
  • If you’re using accrual accounting, you’ll be able to show profitability on your income statement by spreading expenses over three to five years (depreciation).

Dedicated Pro’s:

  • For smaller customers, dedicated makes more business sense
  • A broad range of managed services are available
  • The server belongs to the host and it’s their responsibility to maintain and keep it running
  • Their techs are familiar with the hardware more so than they would be with your collocated equipment
  • You benefit from data center amenities that may not be included in collocation packages (firewalls, load balancing)
  • Entry costs are lower and scalability is enhanced
  • O/S maintenance and upgrades may be included as optional managed services
  • Allows you to outsource IT expertise so you can do what you do best – drive your business

Insight from web hosting gurus

  • “We provision a lot of collocation space to clients who had existing servers, racks, switches and so on at their office. Some overgrow their facilities; some lose their lease – the list is endless. Increased bandwidth, redundancy, lower cost and security are the four biggest factors driving these moves.”
  • “Dedicated is NOT the same as collocation. Dedicated servers are owned by the provider, then leased to its clients. Collocated servers are owned by the clients who lease space at a data center to house them there, taking advantage of their infrastructure and redundancy.”
  • “We hold both dedicated & collocated servers. I love the cost savings from collocation and the tax benefits. However, I do not like the cost when having to replace a motherboard or dealing with a hard drive failure. The item that I look forward to most from a collocation provider is their network and their staff. I like to have some free hands included in the contract which many providers now are giving 2 hours free.”
  • “Long term collocation is often much cheaper however if a large number of hardware advances happen in a short period this can put pressure on providers. As most if not all providers will show what their server is, processor wise at least. Clients always seem to gel or stick to this information as they automatically link this to performance, especially within the reseller crowd, however as we all know the best processor wont ensure the best performance. Dedicated does however allow providers to surf the market as per the spec of their servers but does not grant the same allowances as collocation, in most cases but does relieve the stress of constant hardware updates, replacing failed equipment etc. Personally I collocate, but that’s down to good relationships with owners of a few small to large hardware companies.”
  • “Oddly we went from leasing, to co-location, and BACK to leasing. By leasing (while MUCH more expensive) it allowed our company to focus on continued growth and also employ staff from around the country. When we were co-locating, we had to focus many of our resources locally so that if something happened and hardware needed to be replaced, we had staff locally to take care of the incident. NEVER fun when you’re 100 miles off the coast fishing in Mexico and you find out a hard drive crashed. Co-location can mean a lot of missed vacations when you’re a small operation!”

There are certainly other factors, but this gives you a broad overview of these two types of hosting services.

To your success –

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