Factors or guidelines to select dedicated versus colocated?
At the top of my list are:
- In-house technical expertise
- Proximity of data center
- Are managed services available
- Are monitoring services available
- What about backups and disaster recovery
- Cost of power
- Type of bandwidth offered (BGP/Cogent)?
- Flexibility to upgrade and scalability factors
- Entry cost
- SLA (Service Level Agreement)
- Terms of Service
- Current reviews of each
- Capital Asset Expense
Of course there are pros and cons to each plan, and neither may be the perfect solution for your requirements. Most hosts will work to customize a solution that matches your requirements.
Colocation Pros:
If you’re in close geographical proximity to the data center, you can work on your own equipment (upgrades, etc.) avoiding the cost of outsourced parts and labor.
As you grow, savings from colocation grow as well
It’s still your equipment, so it’s easier to migrate to another provider should problems arise.
As a rule, it’s generally less expensive when compared to unmanaged dedicated
Your fixed assets show on your balance sheet, indicating higher net worth (important to banks and potential customers).
If you’re using accrual accounting, you’ll be able to show profitability on your income statement by spreading expenses over three to five years (depreciation).
Dedicated Pros:
For smaller customers, dedicated makes more business sense
A broad range of managed services are available
The server belongs to the host and it’s their responsibility to maintain and keep it running
Their techs are familiar with the hardware more so than they would be with your colocated equipment
You benefit from data center amenities that may not be included in colocation packages (firewalls, load balancing)
Entry costs are lower and scalability is enhanced
O/S maintenance and upgrades may be included as optional managed services
Allows you to outsource IT expertise so you can do what you do best - drive your business