The results have been interesting to say the least. For instance, let’s look at the rough costs of having your own internal server for one year:

• Hardware: $1500 Server, upgraded/replaced every 3 years = $500/yr
• Electricity: 165 watts continuous @ .14 per kWh = $202.50/yr
• Daily off site backups stored a minimum of 30 days: $800/yr

So, at this point we’re looking at approximately $1400 per year without even factoring in costs for:

• Administration
• T1 or better connection
• Infrastructure – cooling, battery backup, firewall, and physical space to house the equipment

For argument’s sake, we’ll say that you already have a T1 connection ($450+/month), but even if so, we still need to add on the costs of an administrator. Even if we factor in very affordable system administration services ($35/hr) and estimate only 2 hours of SysAdmin time per week, we’re looking at another $3640 per year, bringing our total costs to over $5000. These estimations are on the very low-end and in reality will usually cost much more.

Considering that HostCube VPS configurations start at $960/year and top out at $2400/year for the XL plan, we’re thinking you’d need an interesting set of requirements before it would make sense to seriously consider in-house hosting over a VPS. This is especially true as the VPS configuration would significantly outperform the in-house hosting configuration noted above.

In the weeks to come we’ll be comparing VPS to dedicated hosted servers as well as trying to peer through some of the fog surrounding “the cloud.”

BTW If you’re interested in the differences between managed VPS and shared hosting, check out Shared hosting vs. managed VPS. When to upgrade?