Infrastructure is one of the few technology purchases where a published number is genuinely useful before a conversation. A rack unit is a rack unit, and a server with a stated processor count and disk size is a known quantity. So the ceilings below will get most agencies close to a budget on their own.
What they will not do is tell you how many units you need, and that is the part worth thinking about.
What drives the cost
Five things, in roughly the order they matter.
How many rack units. This is the primary driver and the one most often estimated badly, because equipment lists understate it. Patch panels, cable management and working clearance all consume units, and buying exactly what fits today leaves you renegotiating within a year.
Whether you own the hardware. Colocation rents you the space for machines you bought. Dedicated hosting rents you the machine as well. The second is more per month and removes hardware failure, warranty and replacement from your responsibilities entirely, which for a small team is often the cheaper answer once staff time is counted.
Bandwidth, and its shape. Each line below includes an allowance. What pushes an agency past it is rarely user traffic; it is a backup or replication job whose window overlaps the working day.
Who touches the equipment. Installation, cabling and any later intervention are hourly professional or technical services rather than part of the monthly rent. An agency two hours away that intends to send its own staff should price the travel honestly, because it is not free either.
Growth. The difference between a four unit and a six unit commitment is small. The difference between running out of space and not is a second migration.
Dedicated server hosting, monthly
The provider owns and maintains the machine. Both columns are not-to-exceed ceilings rather than quoted prices, which is a contractual distinction: a quote may come in under a ceiling and may never come in above it. TIPS member pricing is 10% below the published ceiling.
| Line | Specification | Not to exceed | TIPS member |
|---|---|---|---|
| DS1 | 2 CPU, 4 GB memory, 320 GB disk | $80.00 | $72.00 |
| DS2 | 4 CPU, 8 GB memory, 500 GB disk | $100.00 | $90.00 |
| DS3 | 8 CPU, 16 GB memory, 1 TB disk | $120.00 | $108.00 |
| DS4 | 8 CPU, 32 GB memory, 2 TB disk | $140.00 | $126.00 |
| DS5 | 16 CPU, 64 GB memory, 5 TB disk | $160.00 | $144.00 |
Colocation space, monthly
You own the equipment; this is the space, power and connectivity it sits in.
| Line | Specification | Not to exceed | TIPS member |
|---|---|---|---|
| 1U | 1 rack unit | $60.00 | $54.00 |
| 2U | 2 rack units | $80.00 | $72.00 |
| 3U | 3 rack units | $100.00 | $90.00 |
| 4U | 4 rack units | $140.00 | $126.00 |
| 5U | 5 rack units | $180.00 | $162.00 |
| 6U | 6 rack units | $200.00 | $180.00 |
| 10U | 10 rack units | $550.00 | $495.00 |
| 20U | 20 rack units | $880.00 | $792.00 |
| 40U | 40 rack units | $1,350.00 | $1,215.00 |
Every colocation line includes 5 Mbps of bandwidth. The larger sizes are described in the contract as burstable.
The service rates, and where they come from
Installation, migration, engineering and support under this contract are billed hourly, and those rates are the same ones LABUSA publishes under its other TIPS contracts. They run from ninety five dollars an hour at the technical service level up to the senior programme roles, with TIPS members paying 10% below each ceiling.
Rather than reprint a table that already exists, the full card, role by role with the contract's own service descriptions, is set out in what LABUSA services cost through TIPS. It is the same card.
Getting an engineer to the building is billed separately from the engineer's time, and the arrangement surprises people who have not seen it before. Driving is reimbursed against the federal mileage rate published by GSA, whatever it happens to be on the day, because that figure is set by the government rather than by the supplier. Air travel is invoiced at whatever the ticket cost. The hours spent getting there are billed at a reduced proportion of the working rate: 50% of the regular service time rate under the ceiling, and 40% of the regular service time rate for a TIPS member.
What is usually included, and what is not
Included in the monthly line: the space, the power, the cooling, the stated bandwidth allowance, physical security, and the facility being staffed and monitored continuously. That is the whole point of the arrangement, and it is why comparing a rack against the electricity bill for a server room is a comparison that flatters the server room.
Not included: your operating systems, your applications, your licences, your backups and your patching. Colocation is a landlord relationship. If you want somebody to run the machines as well, that is a managed service bought separately, and it is worth being explicit about which you are buying. The definition of colocation sets out that boundary in detail.
Also not included, and frequently forgotten: the one-off cost of getting equipment into the building. Freight, receiving, racking and cabling are real, they are hourly, and they belong in the first year's budget rather than in a surprise.
How to budget
Build the number in three parts and it will survive contact with a finance office.
A recurring monthly figure, which is units multiplied by the ceiling, plus any dedicated servers. Use the ceiling rather than a hoped-for quote, because a budget built on the ceiling cannot be embarrassed by one.
A one-off implementation figure, which is the hourly work to move in. For a straightforward consolidation of a handful of servers this is measured in days rather than weeks, but it is genuinely a project and pretending otherwise is how projects overrun.
A contingency for the second year, not the first. The first year is knowable. The second is where growth, an unplanned project or a bandwidth reality check shows up, and an agency that has budgeted a modest allowance for it does not have to reopen the whole arrangement.
Then compare that total honestly against what the existing room actually costs, including the power, the cooling maintenance, the space itself and the staff time spent on it. That comparison is usually the argument, and it is usually not close once it is done properly.
Comparing honestly against the room you have
The comparison agencies usually make is the monthly rack cost against nothing, because the existing room appears to be free. It is not free; its costs are distributed across budgets that nobody adds up. Doing that addition is the single most useful hour in the whole exercise.
Count the power, which is the equipment draw and roughly the same again for cooling it. Count the cooling maintenance, the service contract on the unit and the repairs when it fails, which for a room running continuously is not an occasional event. Count the space at whatever your organization charges itself per square foot, because that space has an alternative use and somebody wants it. Count the staff time, honestly, including the callouts and the hours spent on things that are facilities work rather than technology work.
Then count what you are not paying for and would have to, if the room were held to the standard a facility is held to: redundant power, monitoring at three in the morning, and somebody physically present.
Two figures are usually missing from the against column and they matter. The replacement cost of the cooling and power plant, amortized, because that equipment has a life and somebody will have to buy it again. And the cost of the outage you have not had yet, which is not a number you can look up but is a conversation worth having with the people who would be affected.
Run that properly and the answer is often clear in one direction or the other. What it is rarely is close, and an agency that has done the arithmetic can defend its decision either way.
One caution about the arithmetic. Do the comparison over the same period on both sides, and make that period at least three years. A monthly rack cost against a one-off equipment purchase flatters whichever side you happen to prefer, because the two are not the same kind of number. Three years is usually long enough for a replacement cycle to appear on the owned side and for any implementation cost to have been absorbed on the rented side, which is the point at which the comparison is telling you something real rather than something about accounting.
Where these figures come from
Every number on this page is a published ceiling under TIPS Contract 260302, Data Center Hosting, Sales and Service, and the same figures appear on the published ceilings for this contract. Which route your purchase should take, and what to record about the decision, is covered in cooperative contract versus your own RFP.
For a figure against your actual equipment list rather than a ceiling, send us what you are running.