5 reasons why the costs of hosted dedicated servers are justified – even when you think it might not be affordable

It is very easy to get lured into the promise of low cost, multi-tenant (shared) servers and/or public cloud solutions, and the promise of instant access to compute, memory, and storage resources. However, before an organization places mission-critical applications and data into one of these environments it is important to carefully consider all of the ramifications.

There are some inherent drawbacks to shared hosting environments. There are very few controls to ensure that the application will remain running. It is almost impossible to know what other companies are using the same server. This entails risks to I/O operations, potentially exposes your application to malicious code, and performance control is almost non-existent, just to name a few. Hosted dedicated servers address all of these shortcomings, and provide numerous additional benefits.

What are the real costs involved of a shared environment?

hosted dedicated serversOne: downtime costs

If the application is core to the business and produces revenue, the cost of downtime could be disastrous to an organization. What would the effect on the business be if the e-commerce site that supplies the majority of revenue suddenly was unavailable for even a few hours? According to Coleman Parkes Research, IT downtime and data loss costs the average company in North America $159,331 annually, with downtime incidents totaling an average of 10 hours per year. Hosted dedicated servers typically provide superior reliability, which can mitigate or eliminate downtime costs.

Two: security threats

It is much more likely that applications and data are open to malicious code and cyber threats when running on a shared environment. Shared servers and public cloud services have become the favorite hunting ground of hackers. This opens up an organization to the costs involved with breaches of sensitive customer information, compliance issues, or major data loss.

Three: poor performance

When some customers on the server experience a spike in traffic and resource utilization, other users suffer. The costs of lowered performance can be substantial. A study by ShopZilla found that a 5-second improvement in website load speed increased revenue by 7%-12%. If a site generates just $100,000 annually, this equates to $7,000 to $12,000 of revenue at risk from degraded performance.

Four: company reputation

There are other costs associated with downtime.  In 2013, the New York Times had an outage that lasted two hours. While it doesn’t sound like a lot it caused their stock price to fall and Twitter exploded with negative feedback from NYT web site users. To capitalize on this event, the Wall Street Journal deactivated its paywall, making the site completely free.

Five: technical support

When a company runs their business on a dedicated server, they control what software is on the machine. It is much easier to troubleshoot and correct performance and security issues should they arise, so they can get back up and running much faster.


For mission-critical applications, hosted dedicated servers are considered the gold standard of performance, reliability, security, and support, and for good reason. While the lower upfront costs of a shared hosting environment may seem attractive at first glance, it is imperative to consider the total cost of ownership of the hosting environment over the long haul.

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