What is the Difference Between a Leased Server and a Dedicated Server?

Posted 5.13.09 by

What’s the difference between a managed dedicated server and a leased server?  The short answer: A lot.  It’s like the difference between leasing a ship and taking a cruise. The difference isn’t just between a raw component and a complete service, it also impacts the total cost of total cost of ownership (TCO).

The e-Tips article gives 7 tips for how you can cut costs by leveraging a dedicated server solution over leasing a server. The 7 tips discuss set up costs, physical security, quality of the Internet connection, Internet security, back up costs, power and monitoring.

A good way to net out the difference between a leased server and a dedicated server is shown in the following table:

Summary Leasing Server Online Tech
Dedicated Server
Cost of Server $ 2,000 $ 0
1 year Operating Expenses $ 12,100
(does not include engineer time)
$ 6,000
Support Engineer (patches, maintenance etc.) $ 3,600
(3 hours / month $100/hr)
$ 0
Total 1 year expense $ 17,700 $ 6,000 (average $500/month for mid-level fully managed server)
Total 3 year expense $ 36,900 $ 18,000



Dedicated servers come at a premium over a raw leased server, but when you add up all the costs involved, the total cost of ownership can be a lot less with a dedicated server.

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