With the economy becoming predominantly digital, businesses need to use IT infrastructure for most of their workflows and store large amounts of data. This has traditionally been called “Hosting” or “Web hosting”. Within the last decade, the most used terms are “Cloud”, “Cloud infrastructure” and “Cloud services”. The terms that feature the word “cloud” emerged in the late 2000s, when Amazon Web Services, Microsoft Azure, and Google Cloud became popular as providers of leased computing infrastructure. These companies, that are are also called hyper-scalers. They have changed a lot of the models of delivering computing capacity and web hosting services.
Before hyper-scalers emerged, traditional web hosting providers used to provide four types of web hosting services – Shared Hosting, where many virtual folders share the resources of the underlying physical server; Virtual Private Servers (VPS), hosted on top of a physical server that is virtualized and divided into virtual environments with any virtualization technology; Bare Metal Dedicated Servers, which themselves are a single tenant hardware appliances that run any OS or virtualization technology; and Colocation services, that allow the users to bring their own serves and appliances to the web host’s data center and create custom technology IT infrastructures on them.
In this article, we focus on two types of hosting services – Dedicated Servers and Colocation Hosting. The reason for that is they both allow the organizations to host their applications and technology workloads in a physically isolated IT hosting environment and to connect their infrastructure to any virtual environments, hosted on the major hyper-scalers. So, let describe what are the main differences between the leased dedicated servers and colocation hosting, so that when you read this publication to be able to identify which of them is a better option for your organization.
Let’s start with the fact that the leased servers have higher monthly recurring costs than the owned hardware applications, colocated in the provider’s data center. The reason for that is that the companies that bought those servers, need to calculate their purchase cost and include it into the monthly hosting service fee. The Colocation services usually have lower monthly fees, than the dedicated servers. However, the owner of the colocated servers usually has a very high hardware acquisition cost.
Let’s describe both infrastructure hosting scenarios in brief.
Leased Servers
These are servers rented from a web hosting provider. It owns physical server hardware and is responsible to maintain it. In other words, if a leased dedicated server fails, it is the provider’s responsibility to replace it in accordance with its terms of service. The web host is also responsible to deliver the service with a certain operating system, IPv4, and IPv6 configurations. The providers usually offer infrastructure support and troubleshooting of the server they offer free of charge. This is something that is worth consideration and provides a major advantage, compared to the technical support, offered by the major cloud providers, which is either non-existent or paid.
If your organization prefers to use dedicated hardware resources, wants to have full control over the server management without worrying about hardware maintenance or depreciation, and most importantly wants to apply its customer security and privacy policy, the leased server is a much better option than any of the services offered by the major hyper-scalers. It is particularly important for US organizations, for example, to use US dedicated servers whenever possible, not cloud services delivered from any of the major hyper-scalers. The reason is that the organization’s privacy is much better protected on the leased servers, than on the leased cloud infrastructure.
Leased servers are usually used under specific contract terms or on a pay-as-you-go basis. The latter gives their users greater flexibility. The organizations that use leased servers, just need to make sure that they have a permanent, safe place to store their data, once they decide to stop using the leased hardware.
Depending on the provider, a leased server can feature a major benefit for its users – an unrestricted quota for data transfer, which is usually called unmetered bandwidth. Such a feature allows the organization that leases servers to push as much data as possible to the physical capacity of the internet network port.
Colocation of own Servers
The colocation services allow any organization to create and deploy a very detailed and sophisticated technology infrastructure at the lowest possible monthly recurring costs. Something that organizations need to take into consideration is that they will have a high hardware acquisition cost, as they need to purchase all the appliances upfront or under a leased contract with any financial institution.
The Colocation service allows the owner of the hardware to plan every single detail – starting with the physical cabinet enclosure where the hardware will be racked and stored, through the physical connectivity between devices colocated on the cabinet, to the possible virtual networking, and all network configurations. The colocation service users need to make sure that they have someone who can go troubleshoot the appliances on-site, in case of a failure on any device.
As a part of the colocation service, the data center provides physical space (cabinet enclosures), power capacity and power feeds, cooling, and network connectivity. The user brings its own network switches, servers, and often its own power distribution units. The user, who owns the equipment is also responsible for the setup, configuration, maintenance, and security of your server hardware. The colocation service provider does not have access to the operating systems and the data and is not supposed to troubleshoot networking devices or physical servers unless authorized by the owner of the equipment.
It is worth spending upfront on hardware appliances, even if you are going to have 1U colocation, and house just one physical server in a data center, if you are planning to use it for IT service delivery for 2 or more years.
It requires technical expertise to manage the servers, handle hardware failures, and perform routine maintenance. You also need to ensure physical security for your equipment.
Finally, keep in mind that if you use a colocation service you might not be able to get a lot of network bandwidth or metered data transfer at a reasonably low cost unless you sign a 1-yea or even 2- year contract. It is the opposite of dedicated servers. Providers like HostColor.com for example offer leased services with dedicated network bandwidth quotas from 250 Mbps to 30 Gbps. Paying the equivalent of 1 Gbps in metered data transfer used over 30 day period to any major cloud provider would cost you a fortune.
Colocation is a less scalable service from an infrastructure point of view, and if you use your own equipment, you’d better overprovision on CPU, RAM, and data storage resources. With the leased servers it is much easier to scale up or down by replacing one physical server with another and moving your data to the new appliance.
Finally, the choice between using leased servers and colocating your own equipment depends on many things and you should plan well. No one can tell you which option is better because others aren’t familiar with your infrastructure demands and your business plans.