Rackspace Cloud Server vs Running Your Own Server

Rackspace Cloud Server vs. Running Your Own ServerEvery web developer needs some sort of web server. Some use a virtual machine running on their workstation. Some use a physical box connected to their LAN. Until recently, it wasn’t really even feasible to consider having a remotely hosted development server. But with the introduction of hosted VPS services like the Rackspace Cloud servers, it’s not only affordable but possibly cheaper, depending on your requirements, to have your own hosted VPS.

The following is a comparison of the total cost of ownership for a Rackspace Cloud Server versus running your own local web development server. We want the comparison to be as fair as possible, and therefore we will try to compensate for the major differences between a virtual server and a physical server.

Rackspace Cloud Server… 1.5ยข per hour? I’ll take 2 please.

Let’s start with a Rackspace Cloud Server. The cheapest Cloud Server plan–which is more than sufficient for web development–starts at $0.015 per hour. All plans include 4 virtual CPU cores and RAID 10, and provide dedicated resources and CPU time. The cheapest plan comes with 256MB memory, 10GB of disk space and a 10Mbps connection to the Internet.

Hourly Daily Yearly Monthly
Price $0.015 $0.36 $131.49 $10.96

Formula: (Hourly rate X 24 X 365.25) / 12

Data transfer

Rackspace charges an additional per-gigabyte fee for incoming and outgoing data transfer, but since this is a dev server, it’s very unlikely this will affect your monthly fee very much. In my case, my dev server never comes close to 1GB in or out.

Bandwidth In Bandwidth Out
Price $0.08 $0.22

For these calculations, we will assume that we will be charged for 1GB incoming and 1GB outgoing transfer.

Our total transfer cost will be 1GB X $0.08 + 1GB X $0.22 = $0.30

Don’t forget to backup your Cloud Server

The last thing to consider is backup. Rackspace Cloud Server’s are hosted on servers featuring a RAID 10 hard drive configuration. Ideally your data should be safe, but just in case something goes wrong with the physical servers your Cloud Server is on, you’re covered. Rackspace’s backup for Cloud Servers is stored on their Cloud Files service. Backup storage is currently free, but it will eventually cost you $0.15 per gigabyte.

We’ll assume you want both a daily backup and a weekly backup, so your backup storage cost would be:

10GB X $0.15 X 2 = $3.00

Note: The backups are transferred via the network interface on your Rackspace Cloud Server that is connected to Rackspace private network. Rackspace does not charge any data transfer fees for any data transferred on this network.

Ok, so after adding up our average monthly server fee, monthly data transfer and backup charges, the total cost for running a Rackspace Cloud Server is:

$14.26 USD

Now let’s see what it costs to run your own server.


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Running your own server

With a Cloud Server, you are essentially leasing space on Rackspace’s hardware. They provide the hardware and make sure it’s working. If it breaks, they have to pay to fix it. With your own server, well… it’s all up to you.

I know you can turn your old Pentium 4 desktop into a great Linux box, but it’s not really fair to compare a professional grade server product to a budget workstation. To make our comparison as accurate as possible, we will use a used or off-lease server that is easily affordable for the average web developer.

Our used server will feature 2 hard drives in a RAID 1 configuration, a Pentium 4 processor, a 300W power supply and 1GB of RAM. I know the RAM here is 4 times the amount in Rackspace’s base Cloud Server, but since we are using a Pentium 4 processor instead of the quad core server class CPU Rackspace is using, I think that its use in our calculation is justified.

We’ll assign a price of $150 for this server.

What if the power goes out?

Since Rackspace obviously has uninterrupted power supplies supporting their servers, it’s only fair that we use one as well. Let’s assume we need a 300W UPS and it costs $50. If we add the cost of our server and UPS together we get $200. Let’s assume our used server will last 2 years (24 months).

$200 / 24 = $8.33

So a Rackspace Cloud Server costs almost double this amount? Not quite. I left out one important factor that you may not think about unless you’re the one paying the hydro bills: electricity. Surprisingly, the cost to run your server 24/7 is not an insignificant factor.

Electricity costs money too, you know

Since I live in Ontario, Canada, I’ll be using Canadian hydro rates for my initial calculations and then converting them to US dollars before adding them to our server total.

The non-Smart-Meter hydro rates for Ontario are as follows:

Condition Rate
First 1000 Kilo Watt Hours per month: 5.8 cents/kWh
Above 1000 kWh: 6.7 cents/kWh

Assuming we use under 1000kWh per month, we’ll use the rate of 5.8 cents.

In order to calculate the cost of our electricity consumption, we must first figure out how much power our server will consume. Since the server will probably be idle for the majority of the day, we won’t use the maximum power consumption but rather an average. I used this website to determine how much power our server will use. The calculator gave me a power consumption of 163W.

Let’s convert that to kilowatts:

163W / 1000 = 0.163kW

  Hourly Daily Yearly Monthly
Price $0.009454 $0.226896 $82.873764 $6.90

Formula: (0.163kW X $0.058 X 24 X 365.25) / 12

Before you get too excited, we still have to convert this back into US dollars. We’ll use $1.00 USD = $0.95 CAD as our exchange rate.

$6.90 CAD X 0.95 = $6.56

Wow, you could definitely argue that shared hosting is cheaper than running your own server on the basis of the electricity cost alone. When we add our electricity bill to our server cost we get:

$8.33 + $6.56 = $14.89


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Wow, they’re close!

  Rackspace Cloud Server Your own server Difference
Average monthly cost $14.26 USD $14.89 USD $0.63

The numbers speak for themselves.

Results with a grain of salt

There are two important aspects to consider when evaluating these results.

First, we made a lot of assumptions about our server. If you prefer to run a low power desktop as a server, can find a cheaper used server, or decide to turn your server off at night, these will significantly reduce the costs for running your own server.

Second, the value of the features and expertise provided by Rackspace is far superior to anything you might set up in your basement. I made a brief chart to highlight some of these differences that can’t easily be assigned a monthly monetary value.

  Rackspace Cloud Server Your own server
Hardware Managed for you by the professionals at Rackspace It’s your problem
Support 24/7 – chat, phone, email That’s up to you – 24/7 (if you don’t sleep)
Scalability Add more RAM and disk space anytime automatically or with a few clicks Turn off your server and open it up

Obviously a Cloud Server is not ideal for everybody, but I bet that it could save a lot of developers a great deal of time and money.

Why not try a Cloud Server? It’s only 1.5 cents an hour!

Cloud Computing & Cloud Hosting by Rackspace



  1. Something work mentioning here:

    Cost of rackspace hosting = $136/yr + bandwidth

    Cost of running a VPS (on OpenVZ) = (less than) $100/yr (including bandwidth).

    A lot of good webhosts will sell you a VM (or VPS) running off of OpenVZ with 500GB/mo bandwidth, which is more than sufficient if you plan to use your server primarily from home since you will reach your ISPs data transfer limits (thanks to CRTC) before you reach your VM’s bandwidth limits.

    If you just want to try out VPSes, you can get a cheap one ($20/year) from LowEndBox (google it, i’m too lazy!).

    But I like your article, the analysis done on price is very accurate. A lot of people don’t do this, the numbers you got is exactly what I got (apart from the slightly cheaper rate for electricity (thanks to Manitoba Hydro (Yay!)))

    I’ve got a Rackspace account too. I followed your pptp tutorial to set up a proxy to Hulu. Now i’m in the process of setting up a Hulu proxy on a $20/year VM!

    Keep up the good work!

  2. The killer feature of Rackspace Cloud Server vs running your own server or even a cheaper VPS service, really, is the fact that you can set it to automatically take snapshot backups daily and weekly, in addition to manual ones – from which you can restore or even “clone” the server.

  3. In my experience, you should NOT use rackspacecloud for anything more than small workhorse-type servers that will require little setup work and keep no valuable information. I was running a server and somehow they lost my server images and were not able to recover it from the backup file in their own cloud files storage after 5 days. No way to upload a backup copy of your server images and techically unknowledgeable tech support so in case of what they called a “bug” you’re out of anything you had in your servers

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