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Why is colocation more expensive than Dedis
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Why is colocation more expensive than Dedis

afnafn Member

Hi,

We all know several companies can offer a nice dedicated server for 30$ per month with 1gbps unlimited, but what I fail to understand is why they charge so much more for 1u colocation?

For example:
Hetzner gives you 1 gbps dedicated, with i7-3770, 6TB and I monthly push near 150TB on that server per month, and it just works fine for 25€/month. But when you ask them for colocation, you won't get the same price.

Comments

  • stefemanstefeman Member
    edited April 15

    Hetzner colocation means selling rackspace. If its 19U you can pretty much use it to host 18x 1U dedicated servers and 1 switch. Naturally its more expensive, and its also aimed at companies rather than individuals.

    Besides, its B2B product so they dont expect any individual to buy it as an individual, and if they want to buy it, they have to pay more for the privilege to do so in order to be worth the provider's time since colocation is vastly different as it also requires physical access and there are risks associated with other client's services since you are physically there compared to when you rent server remotely.

  • afnafn Member

    If you look at the 1/3 RACK-> 14u (14x 1u servers) they give you 1 GBit/s-Port and only 2TB traffic. If you average the cost per 1u, it ends up much more expensive.

    Also hetzner was just 1 example, but I remember seeing the same thing with other providers too

  • Might come down to existing dedicated servers are already racked and ready togo with no added labour required/attention paid to tracking inbound customers servers etc

  • jbilohjbiloh Administrator

    In my experience colocation tends to be less susceptible to the lowest common denominator in terms of pricing. Perhaps people don't feel comfortable sending their valuable IT equipment to the cheapest guy in town -- at least most people don't.

    Where as by comparison dedicated servers mean the end user has no skin in the game, and cheaper the better.

    Jon Biloh
  • SGrafSGraf Member, Provider

    @jbiloh said:
    In my experience colocation tends to be less susceptible to the lowest common denominator in terms of pricing. Perhaps people don't feel comfortable sending their valuable IT equipment to the cheapest guy in town -- at least most people don't.

    Where as by comparison dedicated servers mean the end user has no skin in the game, and cheaper the better.

    • There is also more "downtime" on colo space.
    • Support costs/time taken are another factor.
    • As a provider you tend see different usage patterns for traffic and power when comparing colo vs dedi.

    MyRoot.PW ★ Dedicated Servers ★ LIR-Services ★ Web-Hosting ★
    ★ Locations: Austria + Netherlands + US ★ [email protected]

  • afnafn Member

    @james50a said:
    Might come down to existing dedicated servers are already racked and ready togo with no added labour required/attention paid to tracking inbound customers servers etc

    I was actually thinking about the same theory, these are tested machines, racked, ready to go, they a lot of them and a lot spare part for them, they have no idea what to do with this old hardware so they just keep decreasing their prices instead of having to completely throw them away.

    @jbiloh good point, although, I would feel comfortable to trust my hardware to the cheapest guy in town as long as he proves himself trustworthy.

    Another guess I have is:
    I see some colocs are reasonably priced with some providers, for example serverius offers an extremely reasonably-priced server colocation for 1u-2u, but they don't even offer dedicated servers anyway.
    On the other side, Myloc and hetzner do offer their own servers, so they w ant to leave some place for these in the under ~70€ range, and only offer colocation for big customers with specific hardware requirements, not someone who just needs 1-6 servers for a couple of fun projects

  • qpsqps Member, Provider

    Two very different businesses, even though to the end user, they seem like they should be similar enough to be priced the same.

    Providers are able to use scale to drive down costs on dedicated servers - it's a lot easier/cheaper to have hundreds or thousands of servers of the exact same spec, racked all exactly the same way, all using the same spare parts. They also know from experience that dedicated server customers rarely use all of the bandwidth they buy, and what an average user's server will consume for power. This allows providers to sell things closer to cost on smaller margins because there isn't as much complexity and costs are very predictable.

    Colo is different for every customer. Different hardware, different cabling, different power requirements, different bandwidth requirements. The additional complexity adds cost. Colo customers also generally use much closer to what they buy (bandwidth, power, etc), as they are generally more savvy. Colo generally requires much higher non-recurring costs that can't usually be reused for the next customer, such as installing unique power configurations, cross connects, cabinet/cage purchase/installation, etc.

    QuickPacket - Charlotte, Los Angeles, Chicago, Manchester UK

  • colocation only useful if you are going for big storage.

  • afnafn Member

    @qps, good pointing,

    I was actually wondering, how can they even make profit from 6TB,1 gbps unmetered servers sold for 22€, 1gbps costs me (in Europe) 30€, assume they pay half of what I pay since they get better pricing 15€ just for the connection, that leaves 6€ for power, hardware maintenance (dead 3TB drives mainly), the space, the cooling and on top of all this they need to make a profit and pay salaries!

    how can they even make any money out of these cheap server auction servers? are they perhaps losing/not making money from some products at server auction just for marketing?

    @mhosting_in said:
    colocation only useful if you are going for big storage.

    Sorry man, but I have to disagree here... I would rather say If you need like extremely powerful processors without having to pay 300€/month for 2x i9 or ryzen 9. or some custom config with gpu, etc

    However if all you need is storage, a 10x16 from hetzner will cost you cheaper than having to buy the drives, a 2u servers to fit these in, pay monthly colocation, and more importantly the cost of replacing drives on failure

  • SaahibSaahib Member

    Why nobody is talking about a powerful server housed in 1U, it will certainly cost lesser when colocated than similar powerful server if leased directly from the provider.

  • deankdeank Member, Troll

    Foreign stuff is going to cost more always. Simple as.

    Labor cost for internal stuff is waved first of all.

    "Jarland is stupid."

  • afnafn Member

    @Saahib said:
    Why nobody is talking about a powerful server housed in 1U, it will certainly cost lesser when colocated than similar powerful server if leased directly from the provider.

    Yup I agree with you, this is what I just said :smile:

    @afn said:

    However if all you need is storage, a 10x16 from hetzner will cost you cheaper than having to buy the drives, a 2u servers to fit these in, pay monthly colocation, and more importantly the cost of replacing drives on failure

    But I still wonder

    how can they even make any money out of these cheap auction servers? are they perhaps losing/not making money from some products at server auction just for marketing?

  • deankdeank Member, Troll

    @afn said:
    But I still wonder

    how can they even make any money out of these cheap auction servers? are they perhaps losing/not making money from some products at server auction just for marketing?

    That's been answered so many times that a search will reveal your dire and seducing questions.

    But, well, a key point in any industry is that the cost of hiring humans is the highest expense.

    So, remove humans and operating costs go waaaay down.

    "Jarland is stupid."

  • @afn said:
    @qps, good pointing,

    I was actually wondering, how can they even make profit from 6TB,1 gbps unmetered servers sold for 22€, 1gbps costs me (in Europe) 30€, assume they pay half of what I pay since they get better pricing 15€ just for the connection, that leaves 6€ for power, hardware maintenance (dead 3TB drives mainly), the space, the cooling and on top of all this they need to make a profit and pay salaries!

    how can they even make any money out of these cheap server auction servers? are they perhaps losing/not making money from some products at server auction just for marketing?

    @mhosting_in said:
    colocation only useful if you are going for big storage.

    Sorry man, but I have to disagree here... I would rather say If you need like extremely powerful processors without having to pay 300€/month for 2x i9 or ryzen 9. or some custom config with gpu, etc

    However if all you need is storage, a 10x16 from hetzner will cost you cheaper than having to buy the drives, a 2u servers to fit these in, pay monthly colocation, and more importantly the cost of replacing drives on failure

    i give an example. anything big you want with colo can be done.
    or custom which somewhere not found.

    Thanked by 1afn
  • afnafn Member

    @deank said:

    So, remove humans and operating costs go waaaay down.

    Even if we remove humans, there is still electricity, connection and drive replacement cost, how can 21€/month cover this :open_mouth:

  • deankdeank Member, Troll

    I cannot answer that in Hetzner's case because I have no info.

    But, in OVH's case, they are backed by their governments (France/Canada). Hetzner could be similar in detail. But then NetCup is also similar to Hetzner. You might want to look into German laws. They may have some programs that help datacenters.

    So, even when OVH literally sent a whole building to the sky in a form of "clouds", they will be fine.

    "Jarland is stupid."

  • afnafn Member

    I guess you're right, the only possible explanation is they get way cheaper prices (for network and electricity) than normal consumers, like even more than 50%.

    There is no way they would make no profit at all from the auction servers just for the sake of marketing.

  • DataIdeas-JoshDataIdeas-Josh Member, Provider

    Colo can be cheaper than Dedi. Just depends on what you are wanting to do.
    Over time Colo does become cheaper due to the provider not having to worry about the hardware being "out of date".

    Thanked by 1afn

    Alien Data: VPS and Colo Based In Texas, Unmetered Bandwidth.
    RPIServers: Dedicated Micro Servers - Micro Colo - Unmeterd Bandwidth

  • momkinmomkin Member

    @DataIdeas-Josh said:
    Colo can be cheaper than Dedi. Just depends on what you are wanting to do.
    Over time Colo does become cheaper due to the provider not having to worry about the hardware being "out of date".

    Not true ! At least in some European countries , you can rent Good server for $30 with good amount of bandwidth compared to colo its very expensive with very little bandwidth.

    For me i would never do colo because it wast of money and additional hassle and work.

    colo can be good only for companies who need specific requirements or to have 100% owned hardware.

    Or peoples who want to setup a very expensive server but even then you will still pay a lot for remote hands and spare parts in case of failures.

  • DataIdeas-JoshDataIdeas-Josh Member, Provider

    @momkin said:

    @DataIdeas-Josh said:
    Colo can be cheaper than Dedi. Just depends on what you are wanting to do.
    Over time Colo does become cheaper due to the provider not having to worry about the hardware being "out of date".

    Not true ! At least in some European countries , you can rent Good server for $30 with good amount of bandwidth compared to colo its very expensive with very little bandwidth.

    For me i would never do colo because it wast of money and additional hassle and work.

    colo can be good only for companies who need specific requirements or to have 100% owned hardware.

    Or peoples who want to setup a very expensive server but even then you will still pay a lot for remote hands and spare parts in case of failures.

    And what do you call a "Good" server?
    I know for a fact you can colo 40+TB far cheaper than you can "rent" it.
    Again. Depends on what you are wanting to do.

    Alien Data: VPS and Colo Based In Texas, Unmetered Bandwidth.
    RPIServers: Dedicated Micro Servers - Micro Colo - Unmeterd Bandwidth

  • momkinmomkin Member

    @DataIdeas-Josh said:
    And what do you call a "Good" server?
    I know for a fact you can colo 40+TB far cheaper than you can "rent" it.
    Again. Depends on what you are wanting to do.

    What about the bandwidth is also cheaper on colo ?
    Absolutely not unless if are using this high storage for cold data like backups maybe ?

  • DataIdeas-JoshDataIdeas-Josh Member, Provider
    edited April 16

    @momkin said:

    @DataIdeas-Josh said:
    And what do you call a "Good" server?
    I know for a fact you can colo 40+TB far cheaper than you can "rent" it.
    Again. Depends on what you are wanting to do.

    What about the bandwidth is also cheaper on colo ?
    Absolutely not unless if are using this high storage for cold data like backups maybe ?

    You do realize that 32TB a place might give you is only 100Mbps sustained......
    And if a place is giving you 320TB/1Gbps month for $100/month is basically the same cost as what the actual cost of the connection is if not cheaper on their end.

    You do realize I offer Colo...

    Alien Data: VPS and Colo Based In Texas, Unmetered Bandwidth.
    RPIServers: Dedicated Micro Servers - Micro Colo - Unmeterd Bandwidth

  • afnafn Member

    @DataIdeas-Josh if we take Hetzner or LeaseWeb, Here are some dedis example I rent/rented :

    4x8TB HDD, 100TB traffic @10GBPS(dedicated), LeaseWeb - 80€

    • There is no way you will ever get 10gbps for cheaper than 150 in colo

    4x10TB HDD, ultd traffic @1GBPS, hetzner/eursev- 64€

    • The cheapest coloc I know of in Europe is ~40€ and won't even give you unlimited traffic, if you do pay them extra for say 100TB traffic you end up paying more than 70/month.

    In both cases, I did not even consider the upfront cost of the server or maintenance of drives over time. So sometimes renting is really cheaper than owning hardware no matter how you look at it... and I fail to understand how can I rent a 10gbps network + server for 80€ but if I provide my own hardware I won't get the same network...

  • qpsqps Member, Provider

    @afn - see my response above. Dedicated server users rarely use all the bandwidth they buy. Colo customers more frequently use most/all of what they buy. It's why the services are priced the way they are.

    Thanked by 1afn

    QuickPacket - Charlotte, Los Angeles, Chicago, Manchester UK

  • HostSlickHostSlick Member, Provider

    @qps said:
    @afn - see my response above. Dedicated server users rarely use all the bandwidth they buy. Colo customers more frequently use most/all of what they buy. It's why the services are priced the way they are.

    Indeed! @qps is right with all his points.

    We use maybe 2/3Gbit average permanently per 100 servers (all on their own 1G port.)

    Some clients add additional bandwidth for example +100 Euro per month and not use it.

    That's only reason Hetzner for example let you push the 150TB or even full gig for your 25 Euro. @afn they are big.

    Most won't use their (or much) bandwidth

  • afnafn Member
    edited April 16

    I see, yeah you're probably right guys, It's like the "unlimited storage" that google had, basically most paid users won't even do 1TB, so out of 50 users if 1 uses 100TB it will still be fine for the company... I am assuming Hetzner does the same. Even with Hetzner only for one client (without even considering a pool of all clients) one of my servers does 150-200TB, but my 3 other servers barely hit 5-6 TB/month.
    So yeah It makes sense :smiley:

    a bit off-topic, @HostSlick, do you agree with qps just cuz you know it makes sense or do you happen to offer colocation too?

  • HostSlickHostSlick Member, Provider

    @afn said:
    I see, yeah you're probably right guys, It's like the "unlimited storage" that google had, basically most paid users won't even do 1TB, so out of 50 users if 1 uses 100TB it will still be fine for the company... I am assuming Hetzner does the same. Even with Hetzner only for one client (without even considering a pool of all clients) one of my servers does 150-200TB, but my 3 other servers barely hit 5-6 TB/month.
    So yeah It makes sense :smiley:

    a bit off-topic, @HostSlick, do you agree with qps just cuz you know it makes sense or do you happen to offer colocation too?

    Yup, offering Dedicated Servers, Colocation and the whole pallet of services as well with our very own hardware.

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