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What are the advantages of doing this over just paying for computing power on AWS or some other cloud service? Feels like it would be a very small niche at this

What are the advantages of doing this over just paying for computing power on AWS or some other cloud service? Feels like it would be a very small niche at this point.

icebraining 12y ago
Cost: https://blog.serverdensity.com/saving-500k-per-month-buying-your-own-hardware-cloud-vs-colocation/ https://blog.serverdensity.com/saving-500k-per-month-buying-...
dsplatonov 12y ago
i think AWS is good, when you're not sure if you will use all resources of your servers or need scalability. If you know your growth rate, what type of resources are used, etc. it will be cheaper to have servers in a datacenter instead of using AWS. Many companies, upon growing, starting to rent a space in datacenter or even build their own.
gtirloni 12y ago
AWS comes with a ton of added functionality that may not be relevant to you, especially if you've no need to scale or deploy machines in seconds. That comes at a cost. It's a shallow orange vs. apples comparison, but look at the price of colocating 1/3 rack at Hetzner (119EUR). If you already own the hardware, have no need to use any advanced AWS feature, have the skills to manage it, etc.. sometimes it make sense. For personal and/or SMB needs, it usually not worth the trouble (specially regarding skills to maintain it). So you're right, it's becoming more and more a niche.
caw 12y ago
Cloud is definitely better if you need to scale out, but if you need either raw performance, have requirements for particular hardware (e.g. Backblaze with their custom disk shelves, certain hardware appliances, tape backup requirements), or if you want the cheapest cost per month then a colo may be right for you. Remember it's cheaper because you're paying for the sysadmin time and remote hands, versus Amazon with their people. You could also do hybrid approach - colo for core infrastructure and cloud to scale out, but that's more difficult to setup. At a certain scale of colo or with very heavy security requirements you'll find it's cheaper to have your own datacenter.
jlawer 12y ago
Cost is the big one, If you can manage your own metal you can save a LOT. 50K AUD of gear would cost us ~ 10x PER YEAR for the same VM sizes (many are 32gb of Ram, 8+ vCPU, reasonable IOPS). IP addresses is another. AWS gives you 5 before you have to start applying for them. We do email marketing, so we need a lot of IPs (we give dedicated IPs to each customer). With APNIC (Asia Pac) we have a /22 and a /23 range (1536 IPs) for ~ $2900 per year. Legal reasons are a whopper as well, Australia has some tight laws around privacy and liability if an overseas partner leaks your data. We still host a lot of things on cloud providers (Rackspace & AWS in both Sydney and US) sites, but at the end of the day our VMs out perform cloud VMs and are considerably cheaper.
- MoOmer 12y ago
  Let me also say that comments about vm size on EC2 almost never consider that bare metal performance can be magnitudes better. If you can build a redundant system, and don't need the extra 99.999999s of hardware resilience, but can have 99.995 network uptime, dedicated is great.
  - jlawer 12y ago
    I would argue that dedicated servers are MORE resilient then any cloud provider. And it really isn't that hard, 2 enterprise class servers + VMWare or similar and you have a HA cluster. The hardware support is largely done by the hardware vendor under their support contract (4 hour mission critical) and having redundancy means a single hardware failure isn't critical. I have had 4x 1 minute dropouts in the past 18 months from our hosting vendor upgrading their routers always at midnight localtime. They provide diverse data paths and we have not lost connectivity despite major outages. If I thought I needed to I could get a separate connection from one of about 20 providers in the local DC I am located in. I really believe many people put too much weight on the complexity of managing physical hardware, when your already doing 90% of the administration anyway on a cloud server. Yes it is capital intensive, but you will likely make the money back in your first 12-18 months.
    - daigoba66 12y ago
abc123xyz 12y ago
cost! Cost!! COST!!! I collocate 5x 4u servers with 24 and 36 drive bays, 128GB ram, SSD drives squished in for OS, for a total (multiple raid 5 volumes for each 6 disks) usable space for my project of 375 TB Power and 2-3gbit of bandwidth is included, as well as remote hands to check up on server (for example IPMI sometimes does not work) or replace drives (pay extra for enterprise grade drives would save you alot of hassle in long term!) for .... €1500 / month now go and calculate the cost of that on AWS
- davb 12y ago
  I absolutely agree in the long term, but can you say a little about how much those servers cost initially? I tend to favour dedicated servers which I own over VPS but for small businesses with extremely constrained budgets ("prove we can make money before we invest in hardware") and startups, flexible virtual servers can be a great way to ramp up in the beginning.
  - blibble 12y ago
    that long term can be pretty quick though... in the UK at least you get 100% tax relief for plant (hardware) expenditure up to a limit (currently half a million a year) you get no tax relief for opex.
  - abc123xyz 12y ago
    About $10,000 per server, equipment (very heavy) was shipped from US so there were import duties but it worked out a little bit cheaper than buying in EU in end, and had other reasons to shop in US. Anyway its a once off cost, that accountant can do all sorts of magic with this. Ive been in business for 7 years and hope to remain around for as long. Have already saved money as to compared to renting dedicated servers before. AWS etc were never an option the sums simply never work out. AWS might be great at first when you are starting out, but the costs can cripple a business, especially if you dont have others peoples venture capital to burn. edit: when bandwidth costs are factored in the difference is and order of magnitude between my current setup and amazon, at time of this post using 2200 mbit outgoing, 800 incoming edit2: my only regrets is not collocating earlier, have spent well into upper 6 figures over all the years :( on renting, AWS etc werent around when was starting off either.
waivej 12y ago
I priced and ran benchmarks for my last server upgrade. AWS was 2x the cost of collocating and some outages around the same time. I think it would have been only marginally more expensive since I could scale my server down to current need rather than project 3-4 years into the future. AWS had the fastest network and but colocation allowed for cheaper CPU and RAM upgrades. As it turns out, my RAM/CPU needs plateaued at 4x my previous server so I have twice as much as I need. AWS got steadily cheaper over that same time and the servers got faster. Upgrading to a new server is pretty disruptive. It would probably be easier to do slowly over time rather than big jumps.

What are the advantages of doing this over just paying for computing power on AWS or some other cloud service? Feels like it would be a very small niche at this point.

icebraining 12y ago

Cost: https://blog.serverdensity.com/saving-500k-per-month-buying-your-own-hardware-cloud-vs-colocation/ https://blog.serverdensity.com/saving-500k-per-month-buying-...

dsplatonov 12y ago

i think AWS is good, when you're not sure if you will use all resources of your servers or need scalability. If you know your growth rate, what type of resources are used, etc. it will be cheaper to have servers in a datacenter instead of using AWS. Many companies, upon growing, starting to rent a space in datacenter or even build their own.

gtirloni 12y ago

AWS comes with a ton of added functionality that may not be relevant to you, especially if you've no need to scale or deploy machines in seconds. That comes at a cost. It's a shallow orange vs. apples comparison, but look at the price of colocating 1/3 rack at Hetzner (119EUR). If you already own the hardware, have no need to use any advanced AWS feature, have the skills to manage it, etc.. sometimes it make sense. For personal and/or SMB needs, it usually not worth the trouble (specially regarding skills to maintain it). So you're right, it's becoming more and more a niche.

caw 12y ago

Cloud is definitely better if you need to scale out, but if you need either raw performance, have requirements for particular hardware (e.g. Backblaze with their custom disk shelves, certain hardware appliances, tape backup requirements), or if you want the cheapest cost per month then a colo may be right for you. Remember it's cheaper because you're paying for the sysadmin time and remote hands, versus Amazon with their people. You could also do hybrid approach - colo for core infrastructure and cloud to scale out, but that's more difficult to setup. At a certain scale of colo or with very heavy security requirements you'll find it's cheaper to have your own datacenter.

jlawer 12y ago

Cost is the big one, If you can manage your own metal you can save a LOT. 50K AUD of gear would cost us ~ 10x PER YEAR for the same VM sizes (many are 32gb of Ram, 8+ vCPU, reasonable IOPS). IP addresses is another. AWS gives you 5 before you have to start applying for them. We do email marketing, so we need a lot of IPs (we give dedicated IPs to each customer). With APNIC (Asia Pac) we have a /22 and a /23 range (1536 IPs) for ~ $2900 per year. Legal reasons are a whopper as well, Australia has some tight laws around privacy and liability if an overseas partner leaks your data. We still host a lot of things on cloud providers (Rackspace & AWS in both Sydney and US) sites, but at the end of the day our VMs out perform cloud VMs and are considerably cheaper.

MoOmer 12y ago
Let me also say that comments about vm size on EC2 almost never consider that bare metal performance can be magnitudes better. If you can build a redundant system, and don't need the extra 99.999999s of hardware resilience, but can have 99.995 network uptime, dedicated is great.
- jlawer 12y ago
  I would argue that dedicated servers are MORE resilient then any cloud provider. And it really isn't that hard, 2 enterprise class servers + VMWare or similar and you have a HA cluster. The hardware support is largely done by the hardware vendor under their support contract (4 hour mission critical) and having redundancy means a single hardware failure isn't critical. I have had 4x 1 minute dropouts in the past 18 months from our hosting vendor upgrading their routers always at midnight localtime. They provide diverse data paths and we have not lost connectivity despite major outages. If I thought I needed to I could get a separate connection from one of about 20 providers in the local DC I am located in. I really believe many people put too much weight on the complexity of managing physical hardware, when your already doing 90% of the administration anyway on a cloud server. Yes it is capital intensive, but you will likely make the money back in your first 12-18 months.
  - daigoba66 12y ago

abc123xyz 12y ago

cost! Cost!! COST!!! I collocate 5x 4u servers with 24 and 36 drive bays, 128GB ram, SSD drives squished in for OS, for a total (multiple raid 5 volumes for each 6 disks) usable space for my project of 375 TB Power and 2-3gbit of bandwidth is included, as well as remote hands to check up on server (for example IPMI sometimes does not work) or replace drives (pay extra for enterprise grade drives would save you alot of hassle in long term!) for .... €1500 / month now go and calculate the cost of that on AWS

davb 12y ago
I absolutely agree in the long term, but can you say a little about how much those servers cost initially? I tend to favour dedicated servers which I own over VPS but for small businesses with extremely constrained budgets ("prove we can make money before we invest in hardware") and startups, flexible virtual servers can be a great way to ramp up in the beginning.
- blibble 12y ago
  that long term can be pretty quick though... in the UK at least you get 100% tax relief for plant (hardware) expenditure up to a limit (currently half a million a year) you get no tax relief for opex.
- abc123xyz 12y ago
  About $10,000 per server, equipment (very heavy) was shipped from US so there were import duties but it worked out a little bit cheaper than buying in EU in end, and had other reasons to shop in US. Anyway its a once off cost, that accountant can do all sorts of magic with this. Ive been in business for 7 years and hope to remain around for as long. Have already saved money as to compared to renting dedicated servers before. AWS etc were never an option the sums simply never work out. AWS might be great at first when you are starting out, but the costs can cripple a business, especially if you dont have others peoples venture capital to burn. edit: when bandwidth costs are factored in the difference is and order of magnitude between my current setup and amazon, at time of this post using 2200 mbit outgoing, 800 incoming edit2: my only regrets is not collocating earlier, have spent well into upper 6 figures over all the years :( on renting, AWS etc werent around when was starting off either.

waivej 12y ago

I priced and ran benchmarks for my last server upgrade. AWS was 2x the cost of collocating and some outages around the same time. I think it would have been only marginally more expensive since I could scale my server down to current need rather than project 3-4 years into the future. AWS had the fastest network and but colocation allowed for cheaper CPU and RAM upgrades. As it turns out, my RAM/CPU needs plateaued at 4x my previous server so I have twice as much as I need. AWS got steadily cheaper over that same time and the servers got faster. Upgrading to a new server is pretty disruptive. It would probably be easier to do slowly over time rather than big jumps.