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Understanding the costs behind a dedicated server service is not easy. Often, in fact, the prices of this type of service can vary significantly depending on the characteristics and performance required.
To begin understanding the costs of a dedicated server service, it is important to consider that it is a service, not a product. This means that costs are not only related to the cost of the server hardware, but also to the services and features that come with the server.
We've already discussed in a previous post whether it would be more cost-effective to buy or rent a dedicated server for professional needs, ultimately deciding that the management costs would be so high that renting or leasing it from a hosting company would always make sense. However, today, those who have decided to rent one consistently ask us about the costs of a dedicated server.
How much does a dedicated server cost? This is one of the most frequently asked questions when dealing with a potential client who hasn't yet seen the price list.
“ It costs a lot ,” “ It costs little ,” are two of the most frequent exclamations we hear whenever a customer learns the price.
We rarely stop to understand the value beyond the cost, because the potential client does not always have the expertise or experience gained over time to remember the old adage that says " Good teachers are expensive, but bad teachers cost more".
Therefore, in this post we will go beyond the concept of value, focusing trivially on the price. That is the price of a dedicated server.
Honestly, it is not easy to explain the reason for these costs, especially to non-technical figures who have had experience with low-cost, low-performance and unmanaged servers, or those who have had negative experiences on Enterprise-class servers on very expensive companies with invoices. from thousands of euros per month.
The much and the little mentioned above, must always be related and compared to what are the experiences lived by the user, the expectations, and the understanding of the living costs and the value of a service beyond the mere cost.
In this guide, therefore, we want to bring a "bill of the servant", very fast, but extremely eloquent, simulating what would be the costs that a potential customer would have to face with a low-cost do-it-yourself approach.
The simulation of the costs of a server.
In order to understand the costs of a server in detail, we are going to carry out a cost simulation. With this simulation, it will be possible to understand what are the hardware and service costs associated with the server and how these impact the rent.
In this regard we will simulate the purchase of an entry level machine with the following characteristics AMD Ryzen 5 3600 CPU with 64GB RAM and two 512nVME disks, the production through physical connection to the customer's energy source, a connection to a theoretical very cheap ADSL line, and the monthly management costs that they would have even in the face of a service given by a friend of his.
Server costs
The components that we have indicated and bought at the best offer on Google Shopping or Amazon to date 24 August 2022 are composed and divided as follows.
AMD Ryzen 5 3600 CPU Processor : €140
64 GB RAM : €350
2×512 Samsung – MZVL2512HCJQ-00B00 nVME m2 : €200
Cheap Generic Power Supply (generic price not listed): €30
Cheap motherboard (generic price not listed): €50
Cheap Generic Case (generic price not listed): €50
In total, keeping costs as low and as economical as possible, leaving aside assembly costs, wiring, and the like, we have a running cost of €820 + VAT, or exactly €1000 round.
In order to be transparent we have included the prices found on Amazon and Google below, keeping us at the lowest rates.
Server life cycle
The life cycle of a server in a web hosting datacenter depends on several factors, such as the type of hardware used, the conditions of use and the needs of the companies that use the server. In general, however, the life cycle of a server in a web hosting data center can range from 3 to 5 years.
Sometimes, servers are replaced even sooner if they become obsolete or are no longer able to meet the needs of companies. Other times, however, the servers can remain in operation for a longer period of time, if they are properly maintained and updated.
In our experience, it's fair to say that a server has a useful lifespan of three years before any problems arise and even basic maintenance such as replacing the CPU fan, a stick of RAM, or the power supply is required. This is a very general and approximate estimate, however, considering that the RMA warranty never exceeds two years, even for private purchases, it's safe to say that, even based on obsolescence, the server fleet is updated every three years.
Therefore, these thousand euros quoted above will be spread "amortized", over the three years, where maintenance and a further economic outlay will necessarily be required for the replacement and maintenance of the parts that are no longer functioning.
It is therefore correct to say that every year, an expense of 333 euros is amortized, for a total of 27 euros per month just for the living component, that is, the hardware, the iron and nothing else.
Live costs of a monthly server for connectivity and electricity.
The servers remain on 24 hours a day , so if we multiply 0,3kW x 24 hours we get just over 7kWh of electricity consumption.
Assuming the customer has a good electricity supply contract, a fixed price, and no surprises like those currently occurring with the electricity crisis, the following are plausible and acceptable calculations.
Considering the rates inclusive of various expenses we see that 1 kWh costs approximately 0,25 euros; therefore, for 7kWh that we consume in 24 hours (1 day) we spend 0,25 x 7 = 1,75 euros/day
in 1 year we spend about 1,75 euros x 365 = 638 euros.
Therefore, it must be considered that the annual cost of maintaining a server must be identified in the cost of the hardware and its power supply, 630 + 333 and we are at approximately 1000 euros per year to keep running a server of adequate power but still an entry-level server (for us, for example, it is the hardware base that we sell).
We have deliberately left out the costs of a hypothetical ADSL for just 10 euros per month, which would have brought up the price of 120 € a year, and the symbolic cost of a friend system engineer (son, relative, cousin), to whom to repay us we pay for a pizza a month, which would have impacted the costs for the management of a server by another 120 euros a year, bringing everything to 1000 - 1200 €.
All that would be missing in an amateur server management.
In the simulation above at an amateur level, a lot of things would be missing that instead we find in a professional management of a hosting company that uses economies of scale for its own benefit and that of its customers, and a Paretan principle that allows to contain costs. and get the most out of the service.
For example, we have left out some of the benefits that a user would find in managing a service like ours, for example:
- Security service.
- Geographically redundant backup systems Germany / Finland
- Redundant power lines
- Full duplex connectivity at 1Gbit / s redundant on over 7Terabits of total bandwidth
- Anti DDOS systems for volumetric attacks and IP filtering
- Multiple management of IP addresses
- Technical staff for hardware operation available and available H24 / 365 days a year with an intervention time of 15 minutes
- Perfectly identical and compatible spare parts already in stock and ready for the eventuality
- A monitoring and uptime system
- Professional systems engineers who turn for a total availability service at any time and any day of the year, Christmas, New Year, August XNUMXth included.
And all this, with the same hardware configuration mentioned above, would cost € 127 per month, or € 1574 per year, against the € 1240 per year of an amateur solution, which would not even be adequate to manage the site of the little bar under the house.
Conclusion
In this short article, we've shown and demonstrated with simple (but not excessively so) rough calculations how the cost of renting a managed dedicated server is extremely affordable for users and clients who don't want to make huge investments to manage a single server or a fleet of machines. Outsourcing management not only allows you to access the best and most efficient solutions, but also to access hardware and its purchase at the best market conditions.
While the supplier decides to buy 10 thousand AMD CPUs at a list price reserved by the European wholesaler, perhaps arriving at a 70% discount, the normal user will not have access to this benefit and will perhaps pay € 1000 for what a datacenter can manage. buy for € 250, or 1/4 of the price.
It is therefore clear, based on the type of hardware chosen and based on the type of assistance requested, to consider a reasonable price range in which the server alone is sold between 50 and 80 € to which to add all the systems part that normally has a range. which oscillates between 60 and 120 € per month additional to the costs of the server.
Although this example wanted to examine a specific hardware configuration, the basic concept and style exercise performed is applicable to any case whenever one wonders if the cost of the server is too high or too low. Simulate the purchase of components at the best market conditions, simulate the management costs between connectivity and the cost of electricity and obtain an annual and monthly cost.
If the monthly cost is comparable to that of your Dedicated Server service provider , the price will certainly be fair and in line with the lowest offer on the market. Regarding specific skills for your application area, we always encourage you to review portfolios, case studies, and proven and demonstrable skills, remembering the old adage that " Good teachers are expensive, but bad teachers cost more." We should shift from the idea of cost to the idea of value, but that's another story.
