April 22, 2011
What are the Startup Costs of Colocation Hosting?
Managing an online business requires a lot of responsibilities, and many times the startup costs are underestimated. This is especially true with colocation hosting, which is a very unique hosting type that gives the user access to server space within a state-of-the-art data center. Unlike other types of hosting, colocation hosting does not allow you to lease a server, but rather gives you a secure space to store your own private web server. Colocation hosting is by far the most expensive type of hosting, and is therefore usually only suitable for successful online entrepreneurs or large companies that have extensive hardware and software requirements. The following paragraphs discuss the true startup costs associated with a colocation hosting plan.
Purchasing a Private Web Server
Since colocation hosting plans do not include access to a web server, you'll have to purchase your own, which can range in cost from $1500 to more than $10,000, depending on the model and capabilities. The primary aspects of a web server that determine its overall value are random access memory (RAM) and processor speed. It should be noted that the web server you choose to purchase will have a direct effect on the limitations and capabilities of your websites and online endeavors, whereas conventional hosting plans provide server resources inclusive with the plan itself. Obviously, if you've already purchased a private web server and you are storing it in a home, office, or warehouse environment, then you could potentially save money by eliminating security risks and storing it in a colocation data center.
Shipping the Server
Before selecting a colocation hosting company consider the location of their data centers, as you will have to shift your private server to one of these facilities. Depending on the weight of your server, and the distance that it needs to be shipped, you may have to incur an additional $200-$1000 in shipping costs. In addition, if you want to insure the full value of your server so that is not damaged or lost during the shipping process, you'll also have to purchase shipping insurance, which could add another couple hundred dollars to the startup cost.
Basic Service and Additional Support Costs
The cost of a basic colocation hosting plan is comparable to that of a mediocre dedicated hosting plan, however it should be noted that comprehensive technical support is not included with colocation hosting. Colocation hosting is simply a server storage service, and therefore requires you to perform remote administration on your own web server, unless of course you can pay for additional technical support. Ultimately, if you want a fully managed colocation solution, you'll have to pay anywhere from $200 per month to more than $600 per month, depending on the server rack space required. Furthermore, some colocation hosting companies require you to pay at least a year in advance. Thus, the true startup cost of colocation hosting can range anywhere from a couple hundred dollars (for technically experienced individuals that already own a private server and live close to a colocation datacenter), to $5,000 or more (for individuals that need to purchase a server, ship it, insure it, and pay for additional technical support).
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