For four servers over three years, colocation beats renting dedicated servers only when the hardware is cheap: you already own it, or you buy it refurbished. Buy four new servers and colo doesn’t catch up until month 53, well past a three-year cycle. Put those new boxes in a half rack and it never really does.
Here’s the math, with our own Chicago prices, so you can swap in your numbers.
The setup
Four servers, 36 months, Chicago.
Dedicated side. Four of the “Dual-processor power” plans from our Chicago dedicated servers page: two Xeon E5-2670 v2 CPUs, 64 GB RAM, 1 TB of enterprise SSD in RAID 1 and 50 TB of bandwidth. The order form charges $289/month each, $0 setup, month-to-month, and it’s in stock, which is why I picked it.
Let’s be straight about the chip. The E5-2670 v2 is a 10-core Ivy Bridge part that Intel launched in 2013. It’s old. It’s also the reason the plan costs $289.
Colo side. Prices straight from our Chicago colocation page:
- 1U: $99/month, $100 setup, 1 Gb/s uplink, a /29 (8 IPs), redundant dual-circuit power, 1 hour of free remote hands
- 2U: $199/month, $200 setup, same inclusions
- Half rack (20U): $799/month, $1,000 setup, 1 Gb/s uplink with 10G available
- Full rack (40U): $1,400/month, $1,500 setup, dual 20A 120V circuits, 2 hours of free remote hands
Hardware. This is the number that decides everything, so I’ll show two versions.
Refurbished, like for like: PCSP’s online configurator prices a Dell R620 with two E5-2670 v2s, 64 GB, a RAID card, two new 1 TB SSDs and rails at $612.82 this week, or $802.81 with a three-year parts warranty. Call it $800 a server.
New is a different animal. Nobody sells a new E5-2670 v2 box, so the new column uses a current dual-socket server: a reseller guide puts a mid-range Dell R660 at $5,000 to $10,000, so I’ll use $8,000 (Dell’s own list price starts at $23,298.99). That’s several times the machine you’d be renting, so read that column as what buying new costs, not a fair fight. Get a real quote.
Your time. Two hours a month on hardware (firmware, a failed disk, a trip to the cage) at $75/hour, so $150/month. Change it if your time costs more. It usually does.
The 36-month numbers
| Option | Upfront | Per month | 36 months |
|---|---|---|---|
| Dedicated, 4 × $289 | $0 | $1,156 | $41,616 |
| 4 × 1U colo, refurbished | $3,600 | $546 | $23,256 |
| 4 × 1U colo, new | $32,400 | $546 | $52,056 |
| Half rack, refurbished | $4,200 | $949 | $38,364 |
| Half rack, new | $33,000 | $949 | $67,164 |
Upfront is hardware plus setup fees. Colo per month is the package fees plus $150 of your time. The colo totals leave out power beyond what each package includes, remote hands past the free hour (billed hourly) and spare parts.
| Colo option | Break-even | At month 36 |
|---|---|---|
| 4 × 1U, refurbished | ~6 months | $18,360 ahead |
| 4 × 1U, new | ~53 months | $10,440 behind |
| Half rack, refurbished | ~20 months | $3,252 ahead |
| Half rack, new | ~13 years | $25,548 behind |
Refurbished gear in 1U slots wins clearly, and it’s a fair comparison: the same CPU on both sides.
New gear in 1U slots saves $610 a month and needs 53 months of that to earn back $32,400. That’s a bet that nothing breaks, nothing needs more power, and you keep the hardware well past month 36.
The half rack is the trap. It’s the right home for a cluster with its own switch and room to grow, but for four servers you’re paying for 16U of air.
One caveat on the refurbished column. You’re colocating the same 2013 chip you’d be renting, in a chassis that has already had one working life. The warranty in that $802.81 covers parts, not labor, so a dead power supply is still yours to swap. The rented plan puts that on us.
Four separate 1U packages is the cheapest way in, each with its own uplink and /29. If the servers need to talk to each other, ask us to link the packages on a private network, so replication and backup traffic stays off the public uplinks.
When colo wins
You already own the hardware. Set the hardware line to zero and break-even is basically the first month. This is the cleanest case for colocation, and the one people talk themselves out of.
You need specific hardware. A 24-bay storage chassis, a particular NIC, an HSM, or anything the host doesn’t stock. With colo, you pick it.
You need control of the disks. Some compliance regimes want to know exactly where the drives are and who destroys them. In colo, they’re yours, in a SOC 2 Type II facility.
Long horizons. If you run servers five or six years, every month past break-even is money back. Server life is a moving target, though: in late 2024 Amazon cut the estimated life of some servers from six years to five.
Expensive, power-heavy boxes like GPU servers. The hardware is specific and pricey, and you’ll want to own it. It also needs a high-density facility, which we don’t sell today (see the FAQ).
When dedicated wins
No capex. Nothing up front. That matters more than usual right now: TrendForce expects server DRAM contract prices to rise 13–18% quarter over quarter in 3Q26, so the new-hardware column is getting more expensive while you read this.
Hardware failure is the host’s problem. On an unmanaged server, our SLA commits to 99.5% network availability, a ticket response within 30 minutes and failed hardware replaced within 2 hours. Add a management package and that tightens to 99.95%, 15 minutes and 1 hour. In colo, the 3 a.m. failure is yours to fix.
Small counts. At one server, colo barely ever wins. Our Chicago dedicated servers start at $126/month, and a 1U slot is $99/month before you’ve bought a machine or spent an hour on it.
Short horizons. For a 12-month project, rent. You won’t reach break-even on new hardware, and you won’t be stuck with it afterward.
Power is the number to ask about
Rack space is the cheap part of colocation now. Power is the scarce part. CBRE’s H1 2026 report puts vacancy in primary North American markets at a record low 1.4% and says power availability is the most decisive factor in site selection, leasing and pricing. In CBRE’s H2 2025 data, the average asking rate for 250 to 500 kW requirements was $195.94 per kW per month. Those are wholesale numbers, but the pressure runs downhill to small deployments.
Do the circuit math before you shop. Our full rack comes with dual 20A 120V circuits. Electrical code caps continuous load at 80% of the breaker, and in an A+B pair you size so either circuit can carry everything alone, which leaves about 1.9 kW (16 A × 120 V) for the whole rack. That covers a handful of dual-socket servers drawing a few hundred watts each. It doesn’t cover one 8-GPU box: NVIDIA rates the DGX H100 at 10.2 kW max.
So for dense gear, rack units are the wrong unit. Some facilities bill power per kW. We don’t: each of our packages includes a power allotment in the monthly price, and on the full rack that’s the dual 20A 120V pair. For the 1U, 2U and half rack, ask our sales team how many amps come with the package before you size anything. Wherever you buy, get the usable amps or kW in writing, plus the most power the facility will deliver to your cabinet. Measure your real draw at the PDU under load, too. The PSU rating on a spec sheet (800 W on Dell’s base R660) is a ceiling, not your bill.
What moves the break-even
Power. If getting more power (a bigger package, say) adds $100 a month per server, the refurbished 1U case goes from about 6 months to about 17, and the three-year saving falls from $18,400 to about $4,000. That one line can flip the answer.
Staff time. At six hours a month and $100/hour, the same refurbished case stretches to about 23 months and ends only about $2,200 ahead. Stack that on the power bump and colo never catches up. Most people underestimate this line.
Refresh cycle. Replace at 36 months and new hardware never pays for itself against a $289 plan. Run it to 60 and it scrapes about $4,200 ahead. Decide this before you buy, not after.
My rule: if break-even lands past your refresh cycle, rent. If you already own the gear or can buy it refurbished, colocate it and put the savings somewhere useful.
FAQ
Per month, yes, once the hardware is paid for. Over a full cycle it depends on what the servers cost you. In our four-server example, refurbished hardware in 1U slots paid back in about six months, while new hardware took about 53.
We don’t charge per kW; each package includes a power allotment in its monthly price. The full rack gets dual 20A 120V circuits, roughly 1.9 kW of load you can run with A+B redundancy intact. For the 1U, 2U and half-rack packages, ask our sales team for the included amps. Whoever you buy from, get the number in amps or kW, in writing.
Not with us, today: we don’t sell high-density or GPU colocation. A single 8-GPU server can draw about 10 kW, several times what a standard full-rack circuit pair delivers. If you need it, ask us anyway, and we’ll place it with a partner high-density facility. Wherever it lands, get the power and cooling limits in writing before you buy the hardware.
You own the fix. Our packages include 1 free hour of remote hands (2 on the full rack) for jobs like swapping a drive you’ve shipped in, and time beyond that is billed hourly; the colocation page lists what each package includes. Keep a spare drive and PSU on site, or plan for shipping time.
Yes. Our colocation page offers a hybrid setup combining colocation with dedicated servers. A sensible split is to colo the gear you already own and rent new capacity until you’re sure it’ll stay.
Tell us your server count, power draw and horizon through the colocation quote form and we’ll recommend a starting tier. If renting comes out ahead, the plans are on the Chicago dedicated servers page. Still choosing between Chicago and Ashburn? Ashburn vs Chicago picks the metro by where your users are.
