If you are considering buying your own equipment and finding a hosting provider who will put that equipment in their data centre, then you should also consider the true costs of doing that. Consider the following configuration for a moment. This is a fairly standard high availability configuration used by many of ICO's customers.
Costs
When you add up the costs of all the hardware, software, 24 by 7 support on a monthly basis and then add the colo costs to it you end up with the above solution costing around $4643 dollars per month.
The exact same solution from ICO costs only $4146 per month. That's a saving of almost $12000 over 2 years. That's before considering issues such as:
- How long will it take my staff to implement this project?
- Are my staff adequately trained/ have enough excess capacity to handle this environment?
- How do I back up this environment securely/ with a disaster recovery plan?
- How do I make sure that I am notified when the server is down/ backups fail etc?
- How long is it going to take my staff to recover from a potential problem if they have to go visit the facility?
- Am I going to be able to maintain the same levels of uptime for my customers/management as with a fully managed solution?
- Is this solution as scalable/flexible as one offered by ICO?
- Is my system/data secure in the colo facility?
Calculation Method
To calculate the costs of colocation we included the costs of the following:
- Hardware Costs for all devices in the diagram
- 24 by 7 support contracts for all devices in the diagram
- Software Licensing with Upgrades for the solution
We converted these items to a monthly leasing cost using standard lease interest rates over 2 years. We then added the costs for colocation at a basic datacenter.
If you consider all of the costs listed above you will find that colocation is not as good value as it first seems.