For the past 7 years, I've had a server co-located in Chicago. I built it for fun with a friend while I was in high school and use it mostly to host my projects and a few game servers. It served to replace the old dedicated server and VPSes I was using at the time. 7 years later, I finally decided to run the numbers and see how much I actually saved by co-locating.

Building the Server

The server itself cost me a total of $1,200 to build. At the time, it was much cheaper to buy an old server on eBay/craigslist and gut it for a chassis rather than buy just a barebones chassis. I put in a new E3-1230v2 (the most recent processor at the time within my budget), a brand new supermicro motherboard, some sticks of DDR3 ECC memory, and 2x 1TB WD Black drives. I initially installed windows server 2012 but changed to ESXi later down the road to virtualize windows. Side-note, I had to run Windows Server versus Linux because a lot of the game servers at the time only supported Windows. Trying to use WINE also resulted in awful performance. Windows Server was an overall terrible experience. Besides the unreliability (RDS service crashing mid-session for example), I needed to restart the server almost daily for every single update. The last straw was when it forced itself to reboot for a critical update and restarted itself constantly because the update failed. I ended up having to rent a KVM switch and trying to boot it into recovery mode. Then recovery mode blue-screened. I can't believe companies trust this software. Bare metal windows, never again.


There was a datacenter a few hours away in Chicago with a colocation special going on for $50 /month. I've actually been on that special for the past 7 years. Renting a similar server with similar bandwidth/IP allocation at the time was $89 - $109 /month for a decent provider. Using these facts, we can graph the total cost of hosting over the last 7 years.

I set Dedicated Server A to represent the $89 and Dedicated Server B to represent the $109 range. After just 1.5 to 2.5 years of hosting, colocation has already paid itself off.

Name Total Cost Savings
Colocation $5,400
Dedicated Server A $7,476 $2,076
Dedicated Server B $9,996 $4,596

After 7 years, I had a total savings of $2,076 to $4,576.

Was it worth it?

Oh, it was definitely worth it. There's a certain comfort to owning your own hardware. I don't have to worry about my provider accidentally re-configuring my server or wiping drives (this has happened to me before). I don't have to worry about sharing resources with other clients. My bill doesn't spike abruptly (looking at you AWS) with a surge in traffic or failing to terminate a VM in time. My server has served me well for the past 7 years, and I look forward to giving it some new hardware by the end of the year.

Bonus: Resale Value

One benefit of owning your hardware is the potential to sell it after you're done. I sampled three servers similar to mine on eBay and compared the value to the money I initially sunk into the server.

Field Value
Cost of Server $1,200.00
Server A Price $250.00
Server B Price $280.00
Server C Price $299.00
Average Price $276.33
Delta -$923.67
% Change -76.79%

Ouch, but that sort of deprecation is to be expected with a server this old.