

Ask HN: When to buy vs rent servers? - johnsto19

I am wondering, at what point does it make sense to own your own servers (and switches, routers, whatever) as opposed to rent them monthly through a VPS service?<p>Also, which Windows VPS provider do you recommend?
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cperciva
_I am wondering, at what point does it make sense to own your own servers (and
switches, routers, whatever) as opposed to rent them monthly through a VPS
service?_

When your cost of capital is less than the hosting company's cost of capital
plus the hosting company's markup.

New startups have a very high cost of capital -- because there's a high risk
of them not paying money back, investors demand high rates of return -- so for
a young startup renting is generally better than buying. Large well-
established companies have a very low cost of capital -- banks will happily
loan them money at 5% interest -- so for them it's worth buying hardware.

Figure out where you are on the spectrum and do the math.

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noahc
In general, you should rent as long as possible. This allows you to focus on
your product, unless, your product is web hosting.

There are however, three reasons, why you might consider buying over renting.

1\. Cost -- Renting is more expensive than buying. At some point it probably
make sense to buy. You can buy the individual machine and co-lo or you can buy
the datacenter. Depends on your needs.

2\. Control -- For whatever reason, you need more control. Maybe it's
specialized hardware or something that you can't easily do on a rented
machine.

3.Pride -- This is one that basically is asking to shoot your self in the
foot. A lot of guys want to have the server closet. Once you are established,
maybe it's worth it. Not from a cost or control standpoint, but maybe its
worth it.

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tworats
I wouldn't necessarily agree with renting as long as you can.

You can buy a very cheap server that's much more capable than a cheap VPS
server. Here are some decent servers for about $300; you can often find good
servers for $150:

<http://www.geeks.com/products_sc.asp?Cat=821>

Colocation at a good facility costs $60-100.

So for $150-$300 upfront and $60-$100 monthly, you can have a capable server
hosted at a good facility at a much cheaper cost than the equivalent "rented"
server.

You can use a VPS or something like EC2 as a hot backup, setup replication,
and have a very capable setup for not a lot of cost.

This assumes that you have sys admin skills.

~~~
kazoolist
If you are considering buying one of the servers listed at the above geeks.com
link, take care in doing so.

The ones for < $890 are running NetBurst Xeons ... which means, at the
youngest, they're nearly 4 1/2 years old.

The one at $890 uses a Xeon 5120 which at least gets you into the Core Xeon
era, but you're still looking at a more than 4 year old processor.

If you are going to cheap-out, at least do yourself a favor and buy something
low-end-but-new from somewhere like Dell. You can pick up a new PowerEdge T110
from Dell for $400 which comes with a only-released-a-year-ago Xeon X3430
which is going to be about 3 times faster than that Xeon 5120. Plus you're
going to have a faster FSB, memory, drives, networking, modern interface to
upgrade with, etc.

If you're looking at spending $1k/yr for colocating your server, make it worth
it by co-loc-ing a server that's not 5 years old.

~~~
tworats
Fair enough, but either option is going to be much more than you'd get in a
basic VPS.

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staunch
I'd say when you're spending > $5k/mo on hosting you should sit down and
evaluate the cost of bringing it in-house.

If you can live on a VPS or two you shouldn't even be thinking of buying.

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nreece
I've been using UltimaHosts (Windows VPS) for a while and its been great so
far.

