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Dedicated Server Costs Explained

Dedicated Server Costs Explained

Dedicated hosting are one of the most expensive types of hosting offered by any provider in the industry, with prices ranging from $99.00 to to $299.00 per month. One of the most commonly asked questions regarding Dedicated Servers is: why do they cost so much?.

When shopping for a dedicated server with specific configuration, you will find multiple providers offering the same server for two significantly different prices. Sometimes one provider will offer the same hardware for a price that is five times higher than their competitor. This leaves you, the customer/shopper, wondering what justifies this staggering difference in the monthly cost.

There are many contributing factors to how the pricing of a dedicated server's monthly lease is calculated.

Hardware value

This is one of the highest contributing factors to how the pricing for a dedicated server is calculated. An average E3 Server would cost anywhere between $1,500.00 to $3,000.00, not including the hard drives or RAID controllers. When your providers deploys a new server for you, especially with a SSD, chances are you are getting under-utilized or brand new drives. Providers take their ROI into consideration when calculating the most suitable monthly lease for a specific server configuration.


Providers often peer with multiple network carriers simultaneously to ensure network redundancy and stability. Premium peering is not inexpensive, and the cost for 20 Terabytes of bandwidth from a reliable carrier blend is not low. Premium routes are crucial when it comes to minimizing latency, and your datacenter provider absorbs the cost for premium peering to provide you with a reliable server with reliable network.

Basically, if you are pinging two servers in New York City and find your latency to the first 12ms and the other 60ms, it's routing, peers and hops.


At this day and age, hardware vendors put in a lot of effort into minimizing their hardware's power consumption. And while a 4U server will not consume as much electricity as a 1U Server, deploying a highly-redundant, fail-safe power configuration and UPS Systems that protect the server racks from unexpected power outages is also a highly contributing factor.


Each and every provider has their own Scope of Support. Some providers will offer semi-managed support and their staff will be there 24x7 to help customers with issues that technically fall outside the scope of support.

Theoretically, all providers are obligated to troubleshoot hardware and network issues as part of the service they are offering. However, this is not always the case. Some providers will charge an hourly rate for basically any operation you would request they perform on the server such as troubleshooting network or hardware issues, an OS (re-)install, replacing cables, IP announcement etc... This usually comes at a high cost. Providers who price their servers higher usually tend to go above and beyond to accommodate their customers' requests.

Value Added Services

Last, but not least, value added services. Many providers will work hard to offer their customers some value added services such as complimentary backups, free BGP Setup and IP Space announcement, malware scan, Anti-Spam SMTP Gateways, and most commonly, troubleshooting issues that occur with control panels such as cPanel and Plesk. All of which require a lot of time dedicated by the support staff to pay the proper attention to each customer's request.

There is a lot to consider when shopping for a dedicated server, and the best deal in terms of pricing may not always be the best for the user. As such, when shopping around for a server, have a list of requirements ready and present that list to the provider from whom you plan on ordering a server to make sure your requirements are met.



Ahmed is the President and Co-Founder of DigitalFyre. Ahmed oversees the day-to-day company operations and often works closely with customers.