Dedicated Servers vs. Colo vs. On-Prem vs. Public Cloud

Decide which fits your organization better, dedicated servers, colocation, on-premise, or public cloud

Sure, there are some other infrastructure-related options to consider when it comes to deploying an organization’s IT infrastructure, such as virtual private servers (VPS hosting) or shared web hosting (primarily for the hosting of websites), but for the larger IT infrastructures the infrastructural deployment methods mentioned in the heading of this article are primarily relevant.

So, let’s move on elaborating on the pros and cons of dedicated servers, data center colocation, on-premises deployments, as well as the deployment of IT infrastructure on public cloud, and making a comparison between the different infrastructural options. In this blog, we will not take into consideration private cloud, which combines some of the positive aspects of dedicated servers and public cloud, but we will cover that in a separate blog post.

Dedicated Servers vs. Data Center Colocation

For startups and somewhat smaller organizations, VPS hosting or shared web hosting, but also cloud-based hosting can usually suffice to host an organization’s (web-facing) applications. These types of hosting require no upfront investment, only a monthly fee to be paid to the hosting provider, making it low threshold to get started and have an organization’s applications operational.

Dedicated servers offer better performance and better control over the environment underlying an IT infrastructure. It represents a more appropriate solution when it comes to IT infrastructures for medium and large businesses, or at least when it comes to business-critical, large and/or complex applications. For dedicated servers no pre-investment is required either, but the use of dedicated servers calls for more in-depth knowledge from its users compared to VPS hosting and shared web hosting. Especially when unmanaged dedicated servers are concerned, like Worldstream is delivering to its tech-savvy clients on a global scale.

If we make a comparison between dedicated servers and colocation, the key aspect that emerges is the difference in pre-investments when it comes to the equipment. For data center colocation, a relatively large pre-investment is required. When opting for a colocation rack, solely the physical security, power, power backup (UPS, or Uninterruptable Power Supply), cooling, and network connections are arranged for. An investment in server hardware - and in some cases network equipment - is something you will have to do yourself as a customer. Depending on the type of data center colocation provider, it might be possible to purchase managed services that include the (proactive) management of equipment, but not every colocation provider will be equipped to provide such a service. In terms of colocation we can speak of ‘unmanaged’ and ‘managed’ types of data center colocation, with the latter variant tending more towards a service that could be referred to as ‘dedicated servers’ - the only difference being that the investment in equipment is made by the customers. In the case of unmanaged colocation, your engineers may have to drive to the data center themselves.

In terms of performance assurance, a professional data center colocation service typically offers uptime guarantees - which is usually officially recorded in Service Level Agreements (SLAs). This covers the data center infrastructure right down to the connections in the rack. When choosing dedicated servers, the performance assurance of an IT infrastructure thus your business continuity can be taken to even a higher level. The (proactive) maintenance of server and network equipment, possible replacement of components, and troubleshooting can be included, as well as the desired response times of the hosting provider’s engineers. Sometimes we come across SLAs in the market where you have to pay extra for faster engineering response times.

Yet another difference between data center colocation and dedicated servers concerns the types of equipment and brands of hardware you may use. When selecting a colocation service, you’re completely free to use whatever piece of hardware you want, even obsolete equipment. With dedicated servers you may have some choice, but the options are more limited than would be the case with data center colocation. One of the reasons is that uniformity in the server brand(s) will benefit server administration and maintenance. It concerns both the brand-specific engineering knowledge needed and the server spare parts to be kept in stock. Another reason is that hosting providers need to keep their dedicated servers affordable. The larger the server purchase volume, the higher the discount with a specific manufacturer.

At Worldstream, we solely offer dedicated servers and only use premium brand servers that we source from manufacturers including Dell Technologies and Fujitsu. Choosing dedicated servers over colocation frees you needing in-house expertise on server hardware and brand-specific knowledge. Moreover, these servers can be configured to the smallest details by the way. It’s actually something you would only expect when deploying self-bought servers in a colocation environment. On top of that, the standard engineering response times are lightning fast. On average, it takes 7 minutes for our engineers to provide client support in our data centers. This eliminates the need to troubleshoot server hardware and having to recruit skilled engineers.

Executive Summary

Advantages Dedicated Servers over Data Center Colocation

• No pre-investment in server and network equipment required.
• More comprehensive SLAs possible that also include the server and network equipment.
• Engineering support including equipment spare parts guaranteed.

Advantages Data Center Colocation over Dedicated Servers

• Unlimited choice in the use of equipment (even obsolete hardware) and hardware brands.
• Data Center Colocation vs. On-Prem Deployments

About twenty years ago, the investment in the construction of an on-premises data center or server room was certainly a no-brainer for quite some enterprises. Especially in the case of an extensive IT infrastructure with high data volumes being processed, or the need for a lot of customization, or because of the perceived security of a data center within their own office space. Not anymore. The cost of constructing an on-premises data center/server room is rather high, while nowadays it takes more and more specialist knowledge to build and adequately operate/manage an in-house data center. Also, the steep rise in energy costs makes it an absolute necessity to utilize highly energy-efficient cooling and power technologies while keeping a close eye on the right climatic data center conditions. In addition, a smart infrastructure architecture is needed to achieve an appealing energy-efficient Power Usage Effectiveness (PUE) value, and to make the various data center technologies work well as a whole. All in all, this further increases the specialism required to build and operate a data center/server room in-house.

In addition, there may be high demands on the security processes, data center redundancy, monitoring/management processes, and desired availability of a data center, while the possibilities in terms of connectivity options may also be important to an organization. With regard to a self-built data center, these aspects may be more difficult to address, or at least it’s a point of attention.

Scalability also plays a role when it comes to choosing between a colocation data center and building and equipping your own data center or server room on-premises. Both when it comes to growth of the IT infrastructure as well as a possible contraction. If the size of an organization’s IT infrastructure is reasonably stable, then the construction of a dedicated server room may be relevant, although hitching a ride on all the facilities of existing data center infrastructure usually offers significant added value. If there is a high probability that an IT infrastructure will need to be (significantly) expanded in the future, then a colocation data center usually offers more growth opportunities. The same applies to the likelihood of an IT infrastructure consolidation, read: downsizing. In that case too, data center colocation will better suit your business needs.

A server room within an organization’s own company walls on the other hand, can provide a sense of utter control over the IT infrastructure. In some industries or organizational cultures this can be relevant. For example, for reasons of data governance and privacy, innovation sensitivities, or, for example, the lack of a data center colocation alternative within acceptable distance of a company location. With storage environments including mirror locations, the maximum possible distance between the data center environments may be very limited. In such a case, an on-premises server room may even be the only solution possible.

Executive Summary

Advantages Data Center Colocation over On-Premises Deployments

• Shifting IT investments from CapEx to OpEx.
• In-depth knowledge of construction and operational management of (highly available, energy efficient) data centers/server rooms not required.
• Scalability up and down is assured, provided that a colocation provider offers these opportunities.

Advantages On-Prem Deployments over Data Center Colocation

• Sense of utter control over the IT infrastructure, including data governance and privacy, as well as an organization’s data-sensitivity.
• The exact location of a server room can be determined by the company itself.
• Dedicated Servers vs. Public Cloud

Public cloud servers and dedicated servers are capable of hosting the very same applications. However, cloud servers involve virtualized infrastructure (which runs on server hardware), whereas dedicated servers involve physical infrastructure, in other words the hardware itself on which the applications are deployed. When using cloud servers, virtual resources such as RAM, vCPU, and storage can be allocated to a server instance to achieve an optimal configuration for a specific workload. In the case of dedicated servers, physical components including CPU, RAM, GPU, and storage are added to the server hardware, by which the hardware configuration can be tailored to the workload for which the server is intended.

What it exactly means to a user, the difference between cloud- and hardware-based infrastructure? With a dedicated server, you as a customer of a hosting service provider have the entire hardware system at your disposal. The server is installed by infrastructure service providers like Worldstream in a data center of your choice. In the case of Worldstream, this involves the choice between server locations in the Netherlands and Germany, where some of the most important global internet hubs with low-latency worldwide network reach are located. Dedicated servers, however, can be offered in data centers worldwide. Public cloud servers, representing virtualized infrastructure, are typically delivered from ‘cloud zones’ within certain geographical locations that are disconnected from specifically identifiable hardware. All popular hyperscalers have cloud zones located globally, although most of them are still expanding its density.

When compared to cloud servers, dedicated servers can provide the best and most consistent IT infrastructure performance to an organization. Dedicated servers involve raw compute power that is fully available to a user. With cloud servers, the compute power of the hardware is shared among multiple users, which typically comes at the expense of performance. Dedicated servers also offer the best options for creating the very highest security and compliance levels. However, installing a dedicated server typically takes more time than ‘spinning up’ a cloud server, although Worldstream’s engineers are able to accomplish the installation of dedicated servers tremendously quickly, even when fully customized dedicated servers are concerned - something Worldstream’s engineers actually do by default.

Worldstream's dedicated servers come in two flavors: fully customizable and fixed instant delivery configurations. The first is flexible as it’s completely customizable, which is perfect if you want to have a dedicated server delivered tailored to your bespoke needs. The latter are servers with a fixed configuration that are made for speedy delivery.

The ability to scale up and down instantly is actually one of the main selling points for cloud servers. In the case of cloud servers, it is even possible to set up the scaling up and down automatically via auto-scaling. In that case, other cloud instances, CPUs and memory are automatically added or removed depending on real-time usage. This fits well with applications that have to deal with temporary peak loads when it comes to Internet traffic and requested compute resources. Typical application examples include (international) web shops, event ticketing, marketing- and other action-oriented applications, but also simply for backing up applications and guaranteeing business continuity. The latter is in any case another positive feature of cloud servers. Although public cloud providers are sometimes suffering outages, the uptime of cloud servers is usually solid thanks to the virtualized environment and the sharing of hardware resources. This automatically ensures redundancy, as other cloud instances can simply take over the workload of a cloud instance experiencing issues.

When a lot of customization is required for the underlying infrastructure of an organization’s IT applications, it might be preferable to choose dedicated servers. With dedicated servers, you usually get root access, which allows you to set up and customize the hardware and software completely as you wish. With cloud servers, this certainly is not the case. Although as a user of cloud servers you get a lot of infrastructural functionality and therefore value for money, it is functionality that is dictated by the cloud service provider and offered through predefined packages. With ‘managed’ dedicated servers, there is usually little or no room for customization either. Worldstream delivers its dedicated servers ‘unmanaged’ though, which means that customers have an infinite number of customization options to configure the server hardware according to their own needs.

Lastly, the costs of dedicated servers versus cloud servers can also play a role in choosing either type of infrastructure. Both involve operational costs that do not require any pre-investment in hardware and software, at best some setup costs. We do see that the use of cloud servers can become expensive for users at a certain workload volume. In that case it might be more sensible, at least in terms of costs, to set up a dedicated server environment. But there are also applications to consider where cloud servers, for example combined with dedicated servers, offer a hybrid and highly cost-efficient total solution. However, there are hidden costs that should be considered as well. Setting up a cloud environment is technically less demanding than a dedicated server. On the surface it the cost of a dedicated server is lower, but if you take things like server management into account, the actual cost can be much higher. If you want Worldstream’s team to calculate it for you, let us know by dropping an email at our sales team here.

Executive Summary

Advantages Dedicated Servers over Public Cloud

• Dedicated servers bring raw compute power to the applications, maximizing performance.
• For the strictest security and privacy requirements, a dedicated server is the solution of choice.
• High customization options, offering a seamless fit to any IT infrastructure imaginable.

Advantages Public Cloud over Dedicated Servers

• High flexibility with instant scalability up and down of compute resources, even automatically.
• Cloud servers offer high redundancy in case of cloud instance failures.
• Less to no responsibility over underlying hardware infrastructure.
• Public Cloud Infrastructure vs. Colocation

For organizations, using public cloud infrastructure can have considerable benefits. Increased cost-effectiveness, adaptability, and use of the most recent technologies are all guaranteed. Another benefit of cloud computing is the ability to instantly scale up and down. Colocation on the other hand offers complete control over an organization’s data and IT resources while adhering to uniquely specified levels of compliance and security. Colocation has the added advantage that an organization’s own engineers can drive to the data center themselves, provided it is within driving distance of course, and that the organization’s data becomes almost tangible. Something that is, of course, much less or virtually not the case with public cloud infrastructure, even if in the most exceptional case this data center would be within driving distance.

There are examples of businesses that are fully embracing public cloud. As a company, you may run into issues though if you go all-in on public cloud. Can particular legacy applications that are still crucial to business operations be moved to the cloud, for instance? With public cloud, it is not always possible to move an application to the new cloud environment without rewriting and modernizing legacy software. Rewriting applications can cost too much money, more than the remaining life of an application. So, how to handle that?

Another thing. The cybersecurity options provided by public cloud providers may not always be suitable for all applications, circumstances, and business models. For instance, certain businesses must adhere to tight legal standards for all or at least a portion of their infrastructure related to local data processing and storage. There are various conceivable circumstances where a complete migration to public cloud is not desirable or perhaps even impractical. There are instances when complete transparency and visibility are needed at the hardware systems, software applications, and data levels. When opting for data center colocation, you can pinpoint the exact location of your equipment, applications, and data.

As a company, you might wish to maintain total control over the data’s security, accessibility and compliance. That may be true at least for an organization’s business critical data. The well-known public cloud providers are taking more and more steps to facilitate customers when it comes to data compliance, but the best control over data is still to be gained with an infrastructure other than public cloud. That doesn’t have to be just data center colocation per se. You can also think of dedicated servers or private cloud infrastructure to increase an organization’s grip on data security and compliance, both of which are also offered by Worldstream.

Public cloud really offers many benefits. It is therefore that the well-known hyperscalers such as AWS, Microsoft Azure, and Google Cloud Platform see their revenues from cloud infrastructure services increase by often more than 30 percent per year. Public cloud just has to fit an organization’s (evolving) business context, goals, and ambitions. We often see customers using public cloud for part of their IT infrastructures and business requirements. In other words in a hybrid mix of different infrastructures in which the use of public cloud, for example, has a place alongside private cloud, dedicated servers, and/or colocation.

Public cloud offers the ultimate advantage that applications and associated functionality can be deployed quickly, easily, and flexibly, without the high upfront investments that are needed when buying, configuring, and deploying equipment and software within a data center colocation environment. A new project or application can be started almost instantly from a public cloud environment. For an organization being able to respond rapidly to emerging opportunities gives you a competitive advantage. With our public cloud offering, WS Cloud, you can quickly and easily roll out virtual servers, as well as clone them, enable or disable them, and upgrade or downgrade them. The general upside of WS Cloud is a reduced time-to-market, while you pay only for what you need.

Executive Summary

Advantages Public Cloud over Data Center Colocation Deployments

• Public cloud provides IT infrastructure that is immediately available at operating cost.
• It offers rapidly expandable as well as rapidly shrinkable IT infrastructure, which fits well with workloads with high fluctuations.
• Public cloud comes with an extensive amount of (innovative) IT infrastructure features.

Advantages Data Center Colocation over Public Cloud Deployments

• The data center site can be visited by in-house engineers, providing full grip over engineering, security, and data compliance.
• The ability to fully customize the infrastructure ensures that all types of hardware systems and software, and even legacy applications can be accommodated.

About Worldstream’s cloud offerings

Founded in 2006 by childhood friends who shared a passion for gaming, Worldstream has evolved into an international IT infrastructure (IaaS) provider. Our mission is to create the ultimate digital experience together with you and our partners.

We advise, design, and provide advanced infrastructure solutions, offering peace of mind to IT leaders at tech companies. With a commitment to high-quality infrastructure, industry-leading service, and strong partnerships, we simplify IT leaders' lives and provide round-the-clock 24/7 support.

Worldstream offers every imaginable component for effectively setting up IT infrastructures, also at the edge. Highly customizable dedicated servers, a VMware-powered private cloud, a public cloud solution called WS Cloud, and several storage solutions (File Storage, Block Storage, and Object Storage). Our proprietary WS Cloud public cloud platform powered by Virtuozzo open-source technology additionally offers a cost-effective European cloud alternative, while a broad spectrum of software-defined infrastructure solutions in Worldstream’s portfolio can provide additional flexibility and (cost) efficiency in shaping custom IT infrastructures.

Want to learn more? Schedule a no-obligation brainstorming session with an account manager here.

You might also like:

• Public Cloud On-Ramps are the key to hybrid and multi-cloud success.
• Choosing strategically between public and private cloud. 
• When will you know if cloud computing complements your IT infrastructure?

Have a question for the editor of this blog post? You can reach us  here.