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Building servers, server design, server support, server administration.


Server Ownership

What you'll find here is straight talk about server without the hype. Well, I'll hype the benefits at times to make a point but when it comes to server talk you’re in the right place.

First of all I am no longer selling prebuilt servers like the old days. With the vast amount of components and the new software I have to work with combined with new applications I have been developing there is no out of the box solution for any server.

This server section is for physical servers you purchase and have installed at your home or office. This section does not include cloud servers which are a completely different role design. My website Sea Blue Cloud will offer only cloud server designs and services.

For the physical server in the office we need to narrow down the real costs so you can find the solution you are looking for.

I'll be working from a system designed and build last month for a virtual desktop remote access application sharing environment. To match this server and all the software I found two managed host providers and both totaled over $1,250 per month in costs.

It might seem like a deal but when your server is designed, built, managed correctly that monthly figure might pay off your system in the first 12 months.

Gather up the following information:

Server Information

  • Manufacturer of main component board or brand
  • Model of system board
  • Business role of this server.
  • Estimated life cycle of system board. (typically warranty period plus 2)
  • System device controllers
  • Ethernet controllers
  • Power supply
  • Cooling
  • Chassis
  • Operating system
  • Applications
  • Management software
  • Software roles
  • Component warranty period

Hardware

  • Base unit cost based on primary server role.
  • Hardware upgrades, prices for drives, memory, controllers for future secondary server roles.

Software

  • Primary Operating system. (Primary is host server, secondary would be your virtual server)
  • Management software
  • Backup software (if not handled by host)
  • Software roles
  • Application software

Support Services

  • Warranty on components (Typically custom built systems offer 3 to 5 year component warranties)
  • Service Agreement or Scheduled Service Fees for server audits.
  • Service and support labor rates

Configuration, Setup and Installation

  • Configuration costs. Setting up hardware and software to handle server design roles.
  • System Build costs
  • System Installation on site costs.
  • Other setup fees. (Connecting to other servers, network devices, etc.)

Office expenses

  • Estimated server power usage. (We often suggestion a run schedule to reduce energy costs.)
  • Office cooling increases when you add a server due to the heat exhausted but this is also offset during cooler months by producing heat.
  • Sqft office space.
  • Other office expenses related to hosting your own server.

Total Cost breakdown

  • Total initial costs (includes setup and configuration)
  • Total indirect costs (reoccurring)
  • Total cost over estimated lifespan (calculate 5 to 10 years depending on server role)
  • Total yearly cost
  • Total Monthly cost

Working with some numbers related to the last system build I have the following.

Hardware costs: $3,500.00

Build costs: $500.00

Software costs: $4,500.00

Configuration Costs: $1,200.00

Setup and Installation $350.00

Total: $10,050

First year monthly scheduled maintenance $85.00 per hour 3 hours minimum budget for IT audits on customer owned servers of this class.

$85 x 3 x 12 = $3,060.00 (IT Services if required)

Power consumption for this server running at 80% load is $45.00 per month. Cooling and other power indirect costs would add $20.00 total is about $65.00 per month. This is only an estimate, your load times, server power settings can make this server cost as low as $12.00 per month. But I work from real world schedules and loads.

$65 x 12 = $780.00

Total first year costs $13,890.00

Now let me show you the facts of ownership based on my own servers.

The server designed above is a virtual desktop infrastructure. It is designed to host 20 remote PCs at 80% load. It runs 2 servers in one physical device. Based on Hyper-V and Windows 2008 R2 server. This system is a domain controller and hosting application server. It is offset in price by allowing thin client computers or terminals to run applications in a central environment. Tablet PCs are a good example. This is the same design of the $1,800+ managed host systems.

The savings come as your pass the first year mark. Managed hosts first year would be $21,600.00 to match the same system in total ownership. (Note: This system has Windows 7 desktops that require licenses and are owned by you not leased this is a complete package not limited use in my design.)

The equipment costs per month over a 4 year period would be: (10,050/48) $209.38

The estimated service and management costs per month would be: $255.00

Power and other expenses related to hosting your own server would be estimated at: $65.00

Total monthly costs: $529.38

At the end of your 4 year period or estimated life cycle of the equipment before hard drives, power supplies and other components would need to be changed is $25,410.24. Compare that to managed remote services of the equipment design estimated at, $86,400.00 and you can see a major difference.

$25,410 vs. $86,400

Things that I did not factor into this was internet connection costs. Your office system is for your office which technically wouldn’t require a fixed amount of bandwidth each month. But if you hosted the same remotely you’d have to factor in the internet connection. This is a deal breaker for many companies that need more office computers than remote computers.

Don't get me wrong, managed hosts do offer great services and many of them are very affordable.

I even offer a managed hosting service and enjoy the services myself each day.

To factor your internet connection you'll need to use about 100k per connection as a starting point. Most of my tests show about 96kbps to 196kbps for normal office working in a virtual desktop environment. A simple 1Mb data line (up and down stream) would be able to handle 10 remote connections without many issues. Check your cable and telephone company rates and add that to your remote managed services. If you have remote office workers that connect 100% add those costs to your system monthly to match apples here.

It's not cheap when you take a look at the ongoing costs. I know some opt out of the scheduled maintenance plans. In fact, I don’t offer them directly at first because I setup servers to do many automated tasks even reporting via email when something needs to be addressed. Many office managers can handle simple issues that popup from time to time and remote service can be provided at a low costs when needed. Basically the figures I showed above are to cover managing 20 employees and reimaging 5 of those employees each month after finding unauthorized software installed on the server. If you keep everything on schedule you could save your company $255.00 each month in technical visits. That is up to you, I know how to program scripts to do tasks but I haven't figured out how to program the “Don’t Do IT Human” scripted like HAL 9000. Maybe I don’t want HAL but the script did close the doors to threats very well.

If you need a full design and estimate for your business feel free to call.

The design process is fee based and can be found in the service and rates section.

If you have any other questions or are a hosting service that wants to exchange total cost of ownership information please use the contact form on the contact us page.

Thanks for your time.

More information about server builds can and will be found at Sea Blue Servers which is where I will offer simple and complex designs for our up and coming system designers. The site might not be up today but when it is expect to see allot of server information.

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Building a server and designing the servers role are much different than shopping a brand names website for a server. The building stages for servers starts at the workstations. Building servers, server design, server support, server administration.