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Cloud Computing Hosting vs. Dedicated Hosting Comparison

How does the cost of dedicated hosted server solution compare with on demand hosting?

Hosting Pavilion at Cloud Expo

How does the cost of dedicated hosted server solution compare with on demand hosting?

For the purpose of the comparison I have selected Rackspace for dedicated server hosting and Amazon for on-demand cloud hosting. (In an earlier post I had compared the cost of different cloud providers). This is only a direct cost comparison. I have not considered issues like support, security, reliability, availability etc. There are also several other assumptions I have made that can be challenged.

My one line conclusion is that the market forces have ensured that the prices on paper are comparable – to arrive at what is right for you, performance benchmarking may be called for.

The comparison is based on published data as on 16th February, 2010.


There are 4 listed configuration with standard price (all have 2TB Bandwidth and choice of either Windows Server or Red Hat Linux)

  1. Basic One: 1xDual-Core AMD Opteron, 4GB RAM (DDR2), 2×250GB, 7.2K, SATA (RAID1), ( $419 per month)
  2. Basic Two: 1xQuad-Core AMD Opteron, 8GB RAM (DDR2), 3×250GB, 7.2K, SATA (RAID5) ( $529 per month)
  3. Enhanced One: 1xQuad-Core AMD Opteron, 4GB RAM (DDR2), 2×146GB, 15K, SAS (RAID) ( $959 per month)
  4. Enhanced Two: 1xQuad-Core Intel Nehalem, 12GB RAM (DDR2), 2×146GB, 15K, SAS (RAID) ( $1,059 per month)

Note: Basic One and Two are supposed to be available only in IAD Data centre. When I asked their live assistant I had the following interesting conversation:

Welcome to Rackspace. We are connecting you to our next available operator. 
My name is Ray Q and I am a Live assistant. How may I help you today?
Ray Q: Welcome to Rackspace, how can I help you today?
you: What is IAD Datacenter?
you: It is mentioned on this page –
Ray Q: IAD is a name of one of our datacenters…
you: Which one?
Ray Q: im sorry i cannot release that in formation…
Ray Q: but here is a link to our datacenters
Ray Q:
you: If this is a secret then why do you mention in your site “*Available in IAD Datacenter only”
Ray Q: im sorry i dont know the answer to that..

[I am inclined to think that this response came from a real person and not from a BOT – notice how information is spelled with a space after in]


There are different configurations available but Standard On-Demand Large Instance & Extra Large Instances are comparable to Rackspace offering

To calculate the cost we need to consider multiple elements:

CPU cost: There are different options available but the following configurations are comparable

  • Large Instance 7.5 GB of memory, 4 EC2 Compute Units (2 virtual cores with 2 EC2 Compute Units each), 850 GB of local instance storage, 64-bit platform – cost $0.34 for Linux and $0.48 per hour for Windows – which translates to $245 per month for Linux and $346 per month for Windows
  • Extra Large Instance 15 GB of memory, 8 EC2 Compute Units (4 virtual cores with 2 EC2 Compute Units each), 1690 GB of local instance storage, 64-bit platform – cost $0.68 for Linux and $0.94 per hour for Windows – which translates to $490 per month for Linux and $677 per month for Windows

Persistent storage cost: Since a persistent storage will be required, we need to include an EBS instance also – however the cost is very low – $0.1 per GB per month plus $0.1 per million I/O.

  • Let us assume …
    • …100% redundancy
    • …million I/O per GB per month
    • …user data storage capacity of Basic One = 250GB, Basic Two = 500GB, Enhanced One & Two = 146GB
  • Equivalent data storage cost is:
    • Basic One = $75 per month
    • Basic Two = $150 per month
    • Enhanced One = $44 per month
    • Enhanced Two = $44 per month

Bandwidth cost: Actual cost will depend on the specific application – it is charged at the rate of $0.1 per GB of incoming data (but free till 30th June) and $0.15 per GB of outgoing data

  • Assuming that you require the full 2TB of bandwidth provided by Rackspace it works out to $150 per month till 30th June and $250 per month after that

The Comparison

  1. Rackspace (Basic One @ $419 per month) is cheaper than Amazon (Large Instance with Linux @ $470 and Windows $571)
  2. Rackspace (Basic Two @ $529 per month) is cheaper than Amazon (Extra Large Instance with Linux @ $790 and Windows $977)
  3. Amazon (Extra Large Instance with Linux @ $684 and Windows $871) is cheaper than Rackspace (Enhanced One @ $959 per month)
  4. Amazon (Extra Large Instance with Linux @ $684 and Windows $871) is cheaper than Rackspace (Enhanced One @ $1,059 per month) 

Read the original blog entry...

More Stories By Udayan Banerjee

Udayan Banerjee is CTO at NIIT Technologies Ltd, an IT industry veteran with more than 30 years' experience. He blogs at
The blog focuses on emerging technologies like cloud computing, mobile computing, social media aka web 2.0 etc. It also contains stuff about agile methodology and trends in architecture. It is a world view seen through the lens of a software service provider based out of Bangalore and serving clients across the world. The focus is mostly on...

  • Keep the hype out and project a realistic picture
  • Uncover trends not very apparent
  • Draw conclusion from real life experience
  • Point out fallacy & discrepancy when I see them
  • Talk about trends which I find interesting

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