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self hosted in-house HW. vs. 3rd party hosted
I wanted to get some feedback, I develop and maintain sites and back office apps for many customers. My customers (small businesses) are beginning to migrate their apps etc in-house, and also asking why exactly they should consider 3rd party hosted?
Background: To give you some background, they have been using seven 10Gb Ram VPS from 3rd party for windows hosting. Here they were spending close 2500 to 3500/yr, and slowly over the yrs, apps were not snappy (latency was too much), customer service was no longer the same (regarless of whom they try, over time it just degrades). So, when I came into their office after black friday, they bought 5 Dell Towers for less than that and more processing power (they have OS licenses), and are upgrading their RAM/SSD drives! They have a network admin who comes in and is doing setups for them on a part time basis.
In the industry - there seems to be a couple of trends
First: Linux is has more tooling now and easier to manage, and also able to run some windows apps, still some pending of course.
Second: Also, cheaper good quality hardware is hitting the streets at low prices now that Ebay, Liquidation.com, Craigslist is flooded with used servers and larger RAM and SSD (is very cheap, many customers (people I do work for to build their apps) are comparing self hosted vs 3rd party hosted models, and finding that cheaper, now they can easily get 32 GB on smaller tower with 2.8 to 3.2 ghz v3 for cheap.
Comments
If it is in house only access, ie in office or thru a vpn then hosted there with off site backups would be probs the best and it is the norm at a lot of places. For things such as public facing websites they probs want to look more at out of office hosting.
Just preparing to deliver a server to a company that had their in-house kit stolen with all the data. I'm saying this to give you an example of hidden costs of hosting in-house.
Dedicated or Colo is not only about he price of hardware, network and power.
IMO with current prices (when you can get decent DS for something like $100-$200/month or even less) it is by far cheaper to rent a server than to create and maintain all the infrastructure required for reliable hosting. Unless the site is not important and there is nothing bad about it being down during power outages, provider issues, or something else...
If the small businesses have slow internet connections it might help to host on-site.
It depends. If they will use this infrastructure just for accessing files/apps/stuff inhouse, then, it is normal to host them inhouse. Faster, more flexible and accessible by their technician. On the other hand, as @clouvider said, there are risks: less security, part time tech, maintenance costs - efforts etc.
If the company can secure properly the servers (e.g. secured building, encrypted content etc.) and can afford maintenance cost, this is the way to go.
Now, if the usage will be publicly available or distributed across different divisions of the company, then, rented servers or colocation will be the best solutions. Most of datacenters are doing excellent job in security and they have onsite staff 24/7 for all the needs. The cost will be bigger, but as I said before, it all depends on the needs.
@jvnadr quite often hosting in-house it's actually much more expensive; cost of someone to be available on call 24/7 is several times higher than a good quality dedicated server, not to mention that delivering the same level of power and cooling resiliency it's quite often not possible in some buildings, not to mention costs of delivering it.
In general these days if you calculate EVERYTHING it's economical to host in-house only for hobbist purposes/content that you can live with if it disappears entirely or for long time, there'a a reason why less and less companies maintain local server farms, it's just cheaper overall to deliver good quality, secure and compliant environment in a location that's built only for this purpose.
@Clouvider It is cheaper indeed for many scenarios to use external dc, but some companies would prefer more expensive but also more flexible (according to their needs) solution or an in-site infrastructure, despite the cost.
You're forgetting the time employees sit on their ass because the connection between the office and the datacenter is too damn slow to complete a certain task instantly. Given certain parameters around that, it might be cheaper to host in-house anyway.
Then again, offsite backups are a must-have.
For 1 or 2 servers with typical configurations, it's hard for colo to beat budget dedicated servers. Colo starts looking better if you need specific hardware at specific locations, or if you have enough stuff to consider buying a full rack.
First expense to deduct from any savings - the cost of powering 5 servers. 2nd expense server hardware cost. 3rd "part time" admin. I can easily see this costing more than 3500 total over 2 years. The inhouse solution will be more expensive- so hopefully they gain the performance they seek (I probably would have gotten a higher speed internet connection instead). 4th expense - manager know it all deciding server needs a reboot and everything will be fine and turns it off and on - and well.. that usually doesn't end too well sometimes. if they cant touch it they cant wreck it