Server renting vs. buying is a key choice almost every entrepreneur today must make. Server renting allows you to access a service provider’s high-quality servers in exchange for monthly rent payments. Server buying, meanwhile, is an expensive solution that gives you full control and ownership of your server. Choosing the right solution from the start is crucial for businesses today.
This choice will greatly impact your business’s future performance, growth, and profit. We’ve compiled data on the pros and cons of each to highlight key aspects of the debate. Additionally, you can learn how to judge both in your business’ context with some of the tips we have included. Altogether, this quick guide should prepare you with all the necessary information to make a sound decision.
Pros and Cons of Server Renting
Server renting has its fair share of pros and cons. You can make a sound decision once you know the good and bad aspects of rented infrastructure::
| Pros | Cons |
| Lower initial costs, freeing up capital for other investments. | Recurring rental fees can add up over time. |
| Easily scalable, adjusting resources based on demand. | Limited customization compared to owning the hardware. |
| The provider provides maintenance and technical support. | Reliance on the provider for uptime and security. |
| Access to the latest hardware and technology without extra costs. | Additional fees may apply for exceeding usage limits. |
Pros and Cons of Server Buying
Now, let’s see how server buying performs when critically analyzed. There are sure to be some heavy costs for the incredible freedom and control they provide:
| Pros | Cons |
| Long-term cost savings after initial investment. | High upfront capital investment required. |
| Complete control over hardware and software configurations. | All maintenance and upgrades are your responsibility. |
| Enhanced security as all data remains on-premises. | Scaling up requires additional purchases, making it less flexible. |
| Servers can be undervalued for tax benefits. | Risk of becoming outdated as technology evolves. |
Key Factors to Consider Before Renting or Buying Servers
Let’s review key considerations to help you make a solid decision.
Having as much information as possible before renting or buying a server is the key. Here’s a rough framework of what to prioritize in your decision-making process:
1. Financial Analysis
Your biggest concern should be the financial impact of your decision. You must carefully assess your business’ financial capability and long-term plans. Even if renting proves better for short-term gains, buying may be more profitable in the long run.
Server renting is a good choice if you want to operate on a budget. Despite limitations, you have plenty of control over your machine without the intense financial burden. Buying a server is ideal if you can handle the high up-front costs and believe the ROI to be worth the investment. According to Sherweb, the average monthly operational cost you should expect for a basic on-premises configuration is $1,476.31¹.
2. Expected Business Growth
Your business’ expected growth heavily impacts your choice between renting and buying.
If your business is seasonal or experiences irregular traffic and load, renting a server is the right choice. Small businesses usually fall into this category. With server renting, you can have your provider add extra resources as needed to scale. Maximizing growth opportunities without excessive investment makes server renting perfect for businesses with big dreams and tight budgets.
When you buy a server, you trade scalability for control. You must invest more money in upgraded components or machines to scale a purchased server. Buying is better if your growth is predictable and you do not need on-demand scaling.
3. Technical Expertise
With server renting, the physical machine’s management and upkeep are left to the service provider. Meanwhile, the tenant is responsible for software-level security and management. Most businesses hire full-time system administrators to manage rented servers. On average, in the US, a system admin costs around $96K/yr, according to Glassdoor².
This cost may seem extremely high, but it is relatively affordable compared to server buying. You need both technicians and admins to manage bought servers effectively. You cannot afford to go cheap, as a poorly trained technician can damage hardware and cause problems. Indeed estimates a technician’s salary on average at $73,110/yr³. Combined with admin costs, you will likely spend around $160K on management.
Renting lets you shift the responsibility of upkeep to the provider and focus on more important matters. A solid provider like RedSwitches ensures that your server is happily running without you lifting a finger.
4. Control and Compliance Requirements
Server buying is the way to go if you want control. It is required if you deal with sensitive information, such as financial or medical records. This data is protected under the GDPR and privacy acts like HIPAA. If you rent for such use, you will be held liable for the service provider’s mistakes in case of a breach⁴.
Compliance is a major argument against server renting. The lack of ownership creates situations where provider carelessness can create trouble for every tenant. While renting is largely secure and trustworthy, highly confidential data is too precious to risk storing in rented servers.
5. Customizability Needs
You might need a unique hardware configuration unavailable through renting. Renting deals in standardized components, focusing on the number of cores and other resources provided. Finding the right machine can be impossible if your server needs a specific CPU model with custom RAM and storage configurations.
In such circumstances, buying is the superior option. You can have whatever customization you want in servers you own and can upgrade whenever you want. You can also recover some of the costs by selling old server hardware if you vertically scale.
Let’s recap the discussion with a useful summary table. Have a look!
| Factor | Description |
| Financial Analysis | Assess whether your budget supports renting or buying, regarding short- and long-term returns. |
| Business Growth Projections | Evaluate if your business needs scalability, which is easier with renting but limited with buying. |
| Technical Expertise | Renting shifts maintenance to the provider, while buying requires in-house expertise and resources. |
| Control and Compliance Requirements | Buying offers better control for compliance-heavy industries; renting relies on the provider’s security. |
| Customizability | Buying offers more diversity and choice in components. Renting offers standard configurations with limited choice. |
Hybrid Solutions: Combining Renting and Buying
Who said server renting and buying have to be mutually exclusive?
Many clever business owners today have realized that they do not need to choose one or the other. The two approaches to hosting are highly complementary and cover each other’s weaknesses.
Renting is cheaper and easier to scale, while buying is more secure and customizable. So why not use a bought server for mission-critical tasks and rented servers to scale and store non-critical data?
Such hybrid strategies are a great example of the flexibility you can access today. We recommend entrepreneurs choose this option whenever possible.
Conclusion
The decision to rent or buy servers is complex and depends on multiple factors unique to your business. You must utilize this decision-making framework to determine your business priorities and select whichever solution fits your goals.
RedSwitches dedicated server hosting services are also here to lend a hand. Providing some of the best hardware on lease to many growing enterprises, RS is committed to making your first rental experience special. Contact us today and have your operations up and running before the day ends!
References
3: Indeed, 2024
