Service Providers Decision - Rent or Buy?

This is is probably the biggest decision a potential Service Provider will have to make.

Here are some considerations that may help you decide.

I am basing example on a 3 year period.

(When considering Blobbing capacity, the standard rig has 8 HDD bays. Although this allows a max potential of 144GB per rig (unformatted capacity) using 18TB drives, such large drives are relatively new und untested long term so smaller drives are still usually preferred in DCs - 60-80TB may be a more realistic estimate.)

Buying recommended rig

The cost of the recommended rig is around $4,000+tax. This should provide several years of service. Our recommended supplier also includes a 3-year warranty aswell (although a DC would likely charge a small fee). So it is fair to average the monthly cost at $120 over a 3- year period.
However, a rig would still have significant value after this time, say 50% as an estimate, so you could estimate average to $60.

Colocating

This means having your own rig operational inside s DataCenter. They will only allow server grade equipment in industry standard cases. Typical colocation costs for a 2u rig should be between $100-$200. But also be aware of excess additional power and bandwidth charges (may also apply to rental). Also check hands on charge for maintenance such as replacement of faulty parts.

Buying + Colocating benefits

  • Own hardware
  • Cheaper long term
  • Portable
  • Typically much cheaper to scale Blobbing capacity

Buying + Colocating negatives

  • Higher up-front costs
  • Less predictable costs (possibility for maintenance)

Renting

It will be difficult to get an exact match to the recommended rig specs as each DC/provider has their preferred setup.

Typical rental costs range from $200 upwards for the basic spec. (some locations may be significantly more than this), however rentals tend to be very inflexible and charges for extra storage for increased Blobbing capacity are relatively much higher. Although repair of faulty parts should be included, there will likely still be an excess charge for bandwidth and other manual intervention.

Renting benefits

  • Minimal initial outlay
  • More predictable ongoing costs

Renting Negatives

  • Not portable (basically stuck at that DC)
  • Likely more expensive long-term
  • Nothing is owned
  • Additional Blobbing capacity Lilley much more expensive.

I wont start discussing “bring your own hardware” vs hardware rental, because

  • obviously rental is more expensive in the long run
  • “bring your own hardware” requires more work from your side, which will also need to be accounted. If you dont know how to assemble and pre-configure your own hardware: pay someone to assemble and pre-configure

A couple of notes with regards to colocation providers:

  • dont try to become a customer of the “large” colocation providers yourself, because you are just too small for their business processes
  • they (the “large” ones) will extra charge you. Also they are not flexible enough when it comes to expanding later on
  • go with the smaller ones
  • go with someone that himself bought large amounts of racks/cages or even entire halls within a facility
  • go with someone that is flexible in term of contract terms (e.g. additional rackunit expansion within the same rack later on, if your blobbing requirements should grow)

A couple of additional tips:

  • ask for redundant (a/b feed) power
  • ask for power billing method
  • ask for traffic billing method (e.g. volume based or 95/5 with minimum commitment)
  • ask for out of bands network in case something goes wrong. And something WILL go wrong
  • ask for remote hands cost and accounting model
  • ask for IPv6, because… it’s 2021