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On-Premises Infrastructure vs Virtual Private Servers – A Cost Comparison

Jul 29, 2018, 14:23 PM by Adam Smith

vps cost comparison

Not so long ago, any business that required a server had no choice other than to invest in its own. Fortunately, times have changed, and some hosted services have sprung up. Many organisations have been trepidatious about abandoning their in-house data centres and moving to a virtualised solution, but what they fail to realise is that in today’s fast-moving business world they’re not only paying more to hold onto their ageing infrastructure but are potentially limiting their business’s future profits.

This quick guide looks at the costs of hosting on-premises infrastructure compared to moving to KeepItSafe’s Virtual Private Server (VPS) offering and demonstrates why it’s time to let go of the outdated DIY model.

Upfront costs

It goes without saying that those looking to build new data centre facilities will be facing a hefty investment and there are multiple factors to take into account. This includes everything from planning and design, to building permits, to the extensive equipment requirements. If you have to build a new shell, Forrester estimates that it will cost $200USD per square foot, and that doesn’t take property costs into account. On top of that, you will have to cover the costs of your equipment, which can include: fire suppression & detection, cooling, generators, security and, of course, your servers.

Meanwhile, there are no setup fees or hidden costs for KeepItSafe’s VPS; you choose your package and pay a flat monthly fee. You can start enjoying the benefits of your VPS immediately, rather than waiting for construction and implementation to finish on your data centre.

Managing your facilities

Once your data centre is operational, you have a new series of bills to pay. Energy costs are always a factor for businesses, but as server infrastructure and cooling systems soak up electricity, costs can quickly ramp up. Data centres are such a drain that they make up 3.9% of Australia’s total energy consumption, and energy costs make up 70% to 80% of the cost of running a data centre. Add to that maintenance costs (which can be between 3% and 5% of your initial construction costs annually), taxes, rent, software licenses, and monitoring, and you’re soon facing expensive monthly payments.

Alternatively, you could turn those payments towards a virtual solution that’s guaranteed not to throw up any surprises. You can change your package as and when your business needs dictate and easily forecast your future costs.

Staffing and training

It’s not just the material costs of your infrastructure that you have to face; you need a team of specialists in place to manage and maintain your servers. To put that in perspective, the average salary of a systems administrator in Sydney is around $81,000 per year. On top of your IT team, you’ll need facility managers and security teams. Then you need to take into account training and certification costs.

Compare these requirements to a business using a VPS and things look very different. Immediately you do not need facility management or security, and you can drastically cut back on your IT team. An IDC study for Australia found that SMBs on average run a 30:1 ratio of servers to admins for physical machines, whereas they run 80:1 on virtual servers. Moreover, the bigger the organisation, the more significant that ratio scales. With KeepItSafe’s Premium package you receive monitoring and support, meaning you can take the hassle out of running your servers.

Back-up and disaster recovery

No business can run without a fail-safe in place. Back-up and disaster recovery are a must, and that means either building and maintaining an off-site facility or paying for extra services to take care of it.

With KeepItSafe’s VPS solution all data is stored in Australia in Tier III data centres. There are always two duplicate blade systems configured and capable of taking over from each other with no single point of failure, and all data replicates across geographically separate data centres. You can rest assured you’ll receive continuous uptime and that your data is safely backed up.


Moreover, now we reach the crux of the issue with managing your servers – scalability. Today’s businesses grow at unprecedented rates and keeping your infrastructure in pace with the associated demands is nigh on impossible. Adding new servers requires sign off, office space, full implementation, and as mentioned before, substantial up-front costs.

The beauty of virtual private servers is the ability to add hundreds of servers at the click of a button. You can scale up or down to meet your business’s needs in real-time. Need more RAM? No problem. More vCPU cores? Absolutely fine. Alternatively, you can scale back as, and when you need, so you can avoid paying for server space you’re not using.

A better model

With zero capital expenditure, flat monthly costs, and complete scalability, KeepItSafe’s Virtual Private Server is the perfect solution for any business looking to scale and manage costs effectively.

To discuss VPS for your business, reach out to our team of experts at 1300 722 344 or email us at

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