As someone who has been on both sides of the hosting fence there are few times that I would recommend a client trying to run and manage their own server. Generally, it sounds like a good idea, especially when you look at the cost of managed hosting. It is important to remember that although it may appear cheap to host your own server, using Linux and other open source technologies, the costs can be deceptive and not always be directly tied to money. Most often if careful and honest assessment is done the managed services turn out to be the cheaper option in the end. What am I talking about? Lets see.
Let me clarify that when I talk about running your own server I am not referring to some guy running a Linux web server on an old PC in his basement. I will be comparing both options for the same level and quality of service.
Up front costs
Let’s compare the up front costs for managed hosting and running your own server.
A typical dedicated server will probably start around $175 per month and gives you a modest server with lots of bandwidth and unless you are running heavily used sites or applications then it will most likely be more than enough. So at $175 per month that will cost you $2100 for the year. That may sound like a lot but really it is not because you get a fully functionally server out of the box with operating system and software per installed based on the package you chose. You also get power redundancy because your server is part of a data center. Also the hosting company still owns the hardware and is responsible for replacement if any hardware fails.
If you were to host your own server and you had the same $2100 budget for the first year. Well it would be impossible to build your server, install power redundancy (modest UPS at a minimum), buy the operating system (if you wanted Windows), and buy any backup and protection software. Also on top of that you are going to need a static IP address (you get that as part of the managed services) which can easily run you $100 per month from your ISP which alone eats up over half your budget.
Server administration
Another important thing to consider is server administration. Who is going to run and maintain your server? Who is going to troubleshoot your server when it goes down at 2 in the morning and you start getting panicked calls from your clients.
Most hosting companies will also administer your server for you as part of your managed hosting package, well, for a bit more money of course. This means that if something goes wrong you just call up technical support and they take care of it. This also means they are on the hook for the protection of your data and making sure the backup routine is in place and functioning.
Let’s consider that compared to you having to maintain your own server. If you are a person that is knowledgeable about computers than chances are you could manage to run your server fairly smoothly. On the other hand consider that if you are busy keeping the server running optimally then who is running your business and generating revenue? You can’t do everything and out sourcing your server administration is one of those things you should let go.
Now even if you paid your hosting company double to include server administration into your package ($350 per month or $4200 per year) this is considerably less then a salary for a fulltime IT person which will run you a minimum of $40,000 per year for someone decent and if you decided to use Linux to save money on your OS costs that salary just took a big jump.
Conclusion
The long and short of this post is to say if you need dedicated hosting then go with a professional company because when you stop to consider all the costs involved whether it be money or just peace of mind running your own server will cost you way more.
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