Cost wise how long do you think it would take to break even between owning a server and renting. What is the break-even point for most servers vs. dedicated servers (rentals) on average?

It really depends on where you are going to be hosting your server and what type of server you are getting. If you are going to be renting a checp server from ev1/sm it may not be cheaper to colo. Look at the colo prices and a lot of times you cannot pay less then 100-200 a month for colo and even then you have a small amount of bandwidth. On the other hand if you are setting up a quad xeon with 8Gb of RAM the 400 you pay for colo is not all that bad.

I do not coloate any servers so I do not have any exact estimates. I would say that unless you own the datacenter you are better off for a lot of servers not going the colo route. To be sure you need to do a cost analysis to see what it would cost you. Do not forget that if you coloate you should have extra hardware on hand and you are responsible for anything that breaks.

The only thing that has kept me from colocating some 1U - 2U server is the response time incase something goes down. I hear that Dell offers good plans where the techs will respond in a prompt manner, but I have trouble depending on Dell for my company support. I guess I will stay with a dedicated server for a while and see what happens.

Nevermind break even points...
If you buy your own hardware you know what is in it. You install the OS etc., so you know exactly what is going on.

We work closely with a colocator with an office 2 blocks from FDC in Chicago. They have one awesome business, and if we were in a position to do things like that we would in a heartbeat. Support is our concern as well; I certainly wouldn't rely on Dell. We could otherwise make a two hour drive to set up new machines.

I know FDC has had awesome colocator deals, but a lot of data centers don't. I think it all depends on the deals you can find. Unfortunately FDC supposivly only has room for 100 more machines right now . It would certainly feel nice to own your servers outright though if a data center will give you a good deal.

One issue that I have constantly debated with going with colo is that if a machine dies or drive crashes the down tim and cost it will amount to have it fixed and restored. Unfortunatly for me the clsoet colo is Ny which is still a good 3 1/2 hour drive from me and the cost that colo charge to have a tech go to the machine and work is very high. Most colo I checked with charge about 100 dolalrs up a hour, this does not include the parts.

Where a rented server goes down they usalyl can mirror your server to another server and have you back up in a hour tops.

Good point! Problems occur and it costs more to fix with a colo but if you think about the long term, it is alot cheaper to colo a server. The typical server built with quality parts should not face much of a problem. I choose to colo because it allows me to offer dedicated services!

We dedided to purchase for the same reasons mentioned above. Its all about DR. I didnt want to rely on someone else in the event of an emergency. If a server is down, I am paged and at the datacenter right away.

Rob

It seems to me that part of the equation is how far you are from the data center and your ability to fix the problems as they come up. If you are close to the data center and knowledgeable on the hardware/software (or have a good Admin/tech) colo sounds good. But it it takes you a couple hours to get to the DC, I would be concerned on the ability to really support customers well.

I think its more of a question of how many servers your have rather then a question of time. I was considering colocation but found its cheaper to rent servers unless you have a number servers. That way they all can share a ~20 mbit connection and you just buy your rackspace. Also repairs factor in, when you are solely responsible for repairs you need to have the equipment on hand. This means having a replacement for everything ready to go, so that nearly doubles your cost up front, with 10 servers you only have a 8-10% increase.

Another thing to keep in mind is downtimes, when my PSU went the DC had it replaced in about 20 minutes from the time the ticket was submited and everything was back online, the tech on duty never had to interact with me at all. If I owned the server my tech who was watching the server would have had to wake me up, I would need to drive down to the dc, replace the equipment etc.

We colo, but with the same standard equipment that our datacenter uses. This way, we have control of our own hardware, but if something breaks there's a good chance our datacenter will have spare parts available.

How often have you had problems with hardware? I live by the notion that using quality parts will extend the life of servers. The truth is I have never really had computer hardware go bad with the exception of motherboards. I choose to build my own servers because of this reason.

We're a pretty small shop, with 4 production servers. We've been running one server for 7 years, and the other 3 for the last 2.5 years.

So far <crossing fingers> we haven't had any serious hardware failures. We had one motherboard lose a ram slot, and another box that stopped powering on after a power failure or APC reboot. We were able to fix both of those during scheduled maintenance.

If something did break, there has to be a replacement on-site, or the downtime would get quite long while we located a spare. We found the most economical way of ensuring a spare was to ask our datacenter what servers they use and order the same (Supermicro).

I would say another factor to consider would be the time which you are going to use your equipment. Personally, as technology changes, I feel that the dedicated route is better -- you'll be able to upgrade servers every year or two. If you have a lot of money invested in your colocated server, you have a lesser chance of upgrading to a more powerful system, unless you fancy replacing motherboards, processors, et cetera. I like the dedicated route because when a server becomes out-dated (like a P4 2.4 GHz I had awhile back), you can simply order a more powerful server and cancel the old one. I like the flexibility and the security that (in my opinion) dedicated servers provide. If you do decide to go the dedicated route, make sure you find a reliable provider -- you don't want to be at a place like Managed.com or the (former) TomSyer.

Keep in mind that when a server is outdated and you own it, you can resell the parts. Most of the time companies that are providing a service who actually own the servers and colocate them in a facility have already worked out a cost structure where the server would pay for itself over a couple of months. The truth is owning is always better, your actually able to save alot of money going the owning route and yes it can be very profitable reselling the servers you own!