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In recent months we have had a rather high demand (about 4 customers per week) from users with entry-level servers in the low-cost Dedicated Server range who contact us with the sole need to maintain and/or reduce the rental costs of their server currently rented from some Italian infrastructures.
This may seem trivial as a whole, three or four customers a week may seem like a trifle, but when you look at these numbers in context it is actually something completely new that has never happened before with such consistency.
From the apparent exceptionality of the phenomenon, we have instead seen a regularity to which we have tried to give a reading and understanding of the phenomenon that inextricably links the increase in the cost of energy and the increase in Italian hosting prices and Italian datacenters.
These new customers (or potential customers) contact us saying and reiterating that they have had contractual changes (or at least the communication of the same) and that the cost of the energy component also impacts 20/30 euros per month, which on a 90 € service. per month means having an impact of over 30% overnight.
As we have always specified, abundant 90% of our structure is in colocation at a German enterprise-class datacenter, this indirectly allows us to have the best economic offer thanks to the policies and economies of scale that the datacenter hosting us is able to propose. to its customers.
One thing is to have a server room with 1000 servers in via Caldera in Milan, one thing is to have a company with three certified datacenters that can host over 200 THOUSAND servers per single datacenter.
This detail necessarily leads us to think about economies of scale where even just 10 cents saved on a single server would lead to a saving of 50 thousand euros on half a million servers.
In short, imagine the server room with 1000 servers talking to the European CPU supplier, who is looking for the price for 500 new CPUs, and the big company that decides to place an order for 100 new high-end CPUs.
Could they have the same price and the same offer? Obviously not. And it is the reason why today to cite a real example, a server with AMD EPYC 7502P 32core / 64thrread "Rome" processor that costs only the CPU about 2700 dollars in the list, and an additional 1000 euros of Hardware for a total of about 3500 euros, we can rent it with managed assistance for only 250 € / month.
It's obvious that regardless of the contractual relationships, a large company, thanks to their influence, policies, and economies of scale, can obtain the best possible conditions from their hardware, connectivity, and energy suppliers. However, there are limits beyond which it is impossible to go to save money, even if the electricity suppliers decide to GIVE AWAY energy to the large company in question just to satisfy the customer.
These limits are defined by the cost of producing and importing energy at a national level, which differs significantly from country to country based above all on national energy production policies and any political choices based on taxation and excise duties on the 'electric energy.
This is a rather itchy and new topic for us too, given that apart from this historical period of increases due to the Russian - Ukrainian war conflict, we do not remember from 2005 to today such marked increases at least for what is happening in our country in Italy.
We therefore wanted to delve into the heart of the matter to understand how the cost of electricity varies between some countries and how it might be more convenient and economical to buy a server in Germany rather than in Italy , especially given the significantly cheaper electricity costs in Germany.
Electricity price, in Italy + 82%. In Germany + 17%, in France + 6%
The analysis of the monthly report of the International Energy Agency (IEA) of the OECD highlights the different reaction of the major European economies to the escalation of gas prices, literally derailed in the second half of 2021. In January 2022, on the total of electricity produced in the twelve months, in Germany 42,6% comes from renewables, 29,2% from coal, 14,9% from gas and 11,1% from nuclear power. In France nuclear power dominates, from which 67,4% of electricity production comes, followed by renewables with 23,3% while the use of gas is limited to 5,8%. Italy's greater exposure to the gas price bubble, the source from which half (48,4%) of electricity is produced, over 41,5% of the share from renewables, while the use of coal is low (5,4 , 3,6%) and oil (XNUMX%)
RENEWABLES . Trend analysis over the past year also reveals significant differences among major European countries. Regarding renewables, wind generation is declining in France (-8,9%) and Germany (-5,7%), while it bucks the trend in Italy (+5,6%). Solar generation is up 13,1% in France and 4,0% in Germany, while stagnating (+0,8%) in Italy. Droughts have led to a widespread reduction in hydroelectric power generation.
COAL . In Europe's green heartland, Germany, coal-fired electricity generation, in addition to having a higher share, has risen significantly over the past year, recording a 20,1% increase. France, despite a more limited contribution from coal, increased its production of this commodity by 61,5%, while Italy's growth was limited to 5,6%.
GAS . And gas? It's too expensive, and as a result, France and Germany, which already use it less, are further reducing their use, by 5,1% and 6,0%, respectively. Italy, on the other hand, with nearly half of its electricity generated by gas-fired power plants, is increasing its use, recording a 5,6% growth; we're talking about a commodity whose import prices increased by 255% in December 2021.
ELECTRICITY PRICES . The different electricity generation matrices and their evolution during the crisis are determining a diverging trend in electricity prices for consumers. According to Eurostat data published last April, electricity prices rose by 82,3% in Italy, double the Eurozone average , compared to more limited growth in Germany, where prices rose by 17,6%, and in France, where the increase remained at 6,0%.
How much does a dedicated server consume?
Taking a very trivial account, the servers remain on 24 hours a day, so if we multiply 0,418kW / hour x 24 hours we get 10kWh of electricity consumption.
Considering the rates inclusive of various expenses, we see that 1 kWh costs about 0,25 euros, so for 10kWh we consume in 24 hours (1 day) we spend 0,25 x 10 = 2,5 euros / day and
in 1 year we spend about 2,5 euros x 365 = 912 euros.
If you are looking for a cheap dedicated server.
Therefore, if you are looking for the best conditions for the purchase or rental of a dedicated server, you should take into consideration not only the scaling policies on the extremely affordable costs of the hardware, but also the savings on the energy component.
In short, thanks to the two components, you could reduce the cost of the hardware and the cost of the energy component about between 25 and 50% of the costs that you would get by renting the same server with the same characteristics in an Italian datacenter.
Of course, this is a very approximate figure and each case is a case in itself that must be evaluated and weighed in a tailor-made way, but we can peacefully estimate a real economic saving.
Feel free to contact us, we will show you the real economic savings and further advantages in terms of performance.
