Hosting Your Server: Dedicated vs. Colocation

As hardware costs drop, and the need to control IT costs increases, we’ve noticed that colocation is becoming a viable option for many small and medium-sized businesses (SMB). Whether you're using a Microsoft or Linux-based system,  here’s the bottom line:

Dedicated server(s): You’re renting servers from someone on a server-by-server basis.

With dedicated servers, you pay a premium for not worrying about the hardware: If there are any hardware issues, someone else replaces/fixes it.

Colocation: You’re renting space for your server from someone.

In the case of colocation, you get an allotted amount of physical space in a facility that provides your hardware with power and bandwidth, as well as an ideal environment (e.g. climate control, power supply management, facility security), but what you put in your space is up to you.

What’s Best for You?

Of course, there’s no "one-size-fits-all" answer, but here are some things to consider:

1. In general, for short-term projects (less than a year), dedicated servers are cheaper and easier. But if your hosting requirements are more than two years in duration, you’ll likely see significant cost-savings in going with colocation.
2. In the past, it used to be that if you needed only one or two servers, and after factoring for Microsoft license costs, you were left with the non-choice choice: You went dedicated. But today, with MS Small Business Server, and Essential Business Server being really cost-effective alternatives for SMB, we’ve seen a dramatic shift. Now, you can run a Small or Essential Business Server offsite using colocation, which is something that many dedicated server providers won't do for you. This has dramatically shifted the landscape for SMBs looking to implement MS server solutions.
3. Also, a lot depends on your technical experience and abilities. If you, or a member of your team, is comfortable with computers, then colocation is a reasonable choice. If you know and/or care little about servers, switches, networking, and firewalls, then you may need to factor in the cost of outsourcing this portion of your IT administration.
4. Finally, if you want to have physical access to your machine, then colocation is the obvious answer for you. More...