Table of contents of the article:
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We had already mentioned in an outdated post if it was cheaper to buy or rent a dedicated server for professional needs, coming to decree that the management costs would be so high that it would always make sense to rent it or rent it from a hosting company. However, today those who have decided to rent it always ask us about the costs of a dedicated server.
How much does a dedicated server cost? It is one of the most frequently asked questions every time you interface with a potential customer who has not yet seen the price list.
"It's expensive","It is cheap“, Are two of the most frequent exclamations we hear every time a customer learns about the price.
We rarely stop to understand the value beyond the cost, because the potential customer does not always have such competence or experience gained over time in remembering 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.
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 quoted): 30 €
Economic Motherboard (generic price not quoted): 50 €
Cheap Generic Case (generic price not quoted): 50 €
In total, keeping us low and as cheap as possible, leaving out the costs of assembly, wiring, and the like we have a live cost of € 820 + VAT or exactly € 1000 round 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 is fair to say that a server has a useful life cycle of three years, before problems of any kind arise and require even trivial maintenance to change the CPU fan, a bank of RAM or the power supply. It is a very generic and approximate speech, however considering that the RMA guarantee never exceeds two years even for the purchase from a private individual, it is undisputed to say that even on the basis of obsolescence, the 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 only 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 stay on 24 hours a day, so if we multiply 0,3kW x 24 hours we get just over 7kWh of electricity consumption.
Imagining that the customer has a good electricity supply contract, locked price, and no surprises as is happening in this period regarding the electricity crisis these below are plausible and in any case acceptable calculations.
Considering the rates inclusive of various expenses we see that 1 kWh costs about 0,25 euros; so, for 7kWh that we consume in 24 hours (1 day) we spend 0,25 x 7 = 1,75 euro / day
in 1 year we spend about 1,75 euros x 365 = 638 euros.
Therefore, it must be considered that the annual cost to maintain a server, must be identified in the cost of the hardware and power supply of the same, 630 + 333 and we are about 1000 euros per year to keep a server of adequate power running but still an entry level server (for us, for example, it is the hardware base 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.
We have for example left out some of the benefits a user would find managed by 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.
In this short article, we have shown and demonstrated with simple approximate (but not too much) accounts how the cost of a rental of a managed dedicated server it is extremely convenient for the user and the customer who does not intend to make huge investments for the management of a single server or a fleet of machines. Outsourcing management allows not only to have the best and efficient solutions, but 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 service provider Dedicated Servers, the price will certainly be honest and in line with the lowest offer on the market. Regarding specific skills for your application field, we always invite you to view portfolios, case studies and proven and demonstrable skills, reminding us of the old adage that says "Good teachers are expensive, but bad teachers cost more ", we should go and switch from the idea of cost to the idea of value, but that's another story.