Collocation or Leasing: What is better?

When it comes to expansion of capabilities, many people wonder what is better: to collocate or simply lease a server? There is no certain answer to this question, as everything depends on several aspects. Let’s find out what is the difference between these two ways.

First of all, we should define what each solution means. When you lease a server from INXY or some other dedicated host, it provides server hardware that goes for monthly fee. To put it simply, leasing a server means opening the host’s web-site, selecting a configuration that meets your demands and placing your order. Sometime later your server is online, and you are granted remote access. The second option is collocation. It means that a client provides server hardware, and a host offers infrastructure and space. You bring your server to the data-center, and technicians put it in a rack, giving you IP access to it.

Now when we know exactly what these two options mean, we should discuss which one is better for your situation. As a rule, 90% customers are better with leasing a server rather than collocation. 

Advantages and Drawbacks of Leasing

The main advantage of leasing is minimal upfront expenses. The price for leasing is far less than actual cost of server. For example, you can lease a $3,000 server of Dell, HP or SuperMicro brand for only $150 a month. The host usually can’t make this money on you during 3-12 months, and profits only when you have paid pretty many months to cover the price of a server. This is why a host provider is interested in making customers satisfied and turning them into long-time clients.

Besides, host supports the hardware, because he supplies it. Thus, it is technicians’ task to deal with hardware issues, if such appear. Host also has got hardware for replacement, at least all decent companies do, because they keep many servers in stock, and some spare parts always should be on hand. So if something goes wrong, a host should be able to find a replacement part and fix it quickly.

Scalability is another perk. Many good hosts allow working without contracts, letting users pay for each single month they use the services. If one day you realize that you need more CPU, RAM, or other resources, just inform your host. Its team will find a better solution for you and help you switch to it within a few hours or day. That will cost you a few bucks.

Keep in mind that today servers are being renewed and upgraded very rapidly. For example, Intel company releases new generation of processors and offers solution with more cores. Do not stick to one certain server for too long. Luckily, good hosts buy and offer the latest technologies soon after they have been released. Don’t hesitate to ask your host whether it has some fresh servers, and upgrade to the new generation, if there are any. It is recommended to be done once a year. Interestingly, new solutions cost almost as much as the technologies of previous generation, so you won’t lose much when switching.

Advantages and Drawbacks of Collocation

With the time being, leasing becomes a bit more expensive, while collocation becomes a bit cheaper. But even if you think there are no savings, you actually save over a couple of years. Since everyone wants to have server online for many years, making project successful, most users do have savings with collocation.

Primary advantage of collocation is having full control over the server, including OS, software and characteristics. When you collocate, you may select every single component of the server, even its video card. Thus, you don’t have to worry whether your host has got the latest server technologies – it all depends on you. If you want, you can get top hardware and install it anytime.

Less payment per month is another advantage. You supply the hardware, and have to pay for power, bandwidth and space required. Note that host cannot add any expenses connected with hardware. As a rule, you can collocate a server with enough bandwidth and power for $100/month and cheaper. That applies to 1U server. The more U of space used, the more are expenses, but they are not considerable.

However, if you count on collocation, be prepared for higher upfront expenses. Good hardware costs at least $1,000. The sum depends on the quality of server: if you want to have SAS and RAID drives, g the hardware and you are using server grade gear then count on spending at least $1000 up front to purchase the server.  Depending on how nice of a server you want and if you wish to have RAID or SAS drives, then it can add up to a few thousand dollars real quick.

Since the hardware is yours, you are responsible for providing replacement parts. If you collocate, the host does not have to repair server for you. Indeed, it may simply not have the exact hardware in the inventory. So if you have a server of some specific brand, and host does not have hardware of such company, you will have to fix everything on your own. If data-center is connected far from you, you will have no choice but to go miles and miles, wasting your precious time and money. Remember: it is only your responsibility to supply spare parts and figure out a solution.


As it has been mentioned, most people would benefit more when leasing a server from the host. If you live not so far from a data-center, and it is convenient for you to drive there, you may try collocation. Besides, this is a great variant when you already have a server and have found a great deal for hosting it. Otherwise, just lease a server and get rid of this entire headache. Let the host monitor and fix the hardware, and forget about your duty to update and upgrade. Thus, before agreeing to collocate ask yourself: will you be ready to drive to a data-center in night time, if RAM or hardware fails?