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Colocation Development Server - Home Based Business Guides

Colocation Development Server

Written by Jamie

How to Setup a Cheap Microsoft/Web Colocation Server

Well, cheap is misleading. This article is focused on reducing overhead for the renegade entrepreneur who quits their day job to pursue their digital dreams. Or.. this article could be for the person who is in it for the long run. I’ll show you how and why you will want to do this. This article will focus primarily on Microsoft .NET developers who are likely to use tools like ASP.NET, Web Services, SharePoint, and Dynamics CRM. These environments are demanding, need to be online and can use up a lot of resources. When turning off and on an Azure virtual machine won’t cut it, we’ll show you how to beat that.

What Does a Development Server Cost Anyways?

In the past, I’ve had multiple Virtual Private Servers (VPS), Azure, Digital Ocean and tried about 5 different shared hosting providers. In the end, I’ve found what works best for me. This article will focus on different host configuration but you’ll be able to see the difference in price clearly.

Virtual Private Servers (VPS)

The price for a VPS is very expensive and does not always include all of the licensing that you will need. VPS can be quickly leased and spun up typically within the hour or less.

Microsoft Azure

Microsoft Azure Microsoft provides an incredible web hosting service called Azure. It is extremely powerful and has integration with Visual Studio. One of the key benefits of using Microsoft Azure is that they include the licensing in the subscription. This is something you would have to pay for if you went colocation or on premise.

Microsoft Azure

WINNER: Colocation Server + Microsoft Action Pack

It’s hard to compete with redundancy and the solid platform that Microsoft provides but when you are just getting started it’s important to cut costs until you know your product is solid.


Colocation facilities are really cool. They are sometimes full of thousands of servers, roaring AC units and backup generators the size of small cars. The pricing is usually very cheap comparative to leasing equipment. The downsides with this is you are responsible for everything. If the server breaks or needs rebooting then you have to handle these situations. We choose Dell servers because they have a Dell Remote Access Card (DRAC) which allows us to remote control the server even when it’s rebooting.

Web Server: Dell PowerEdge 1950

Dell PowerEdge 1950This server can be purchased for about $300 dollars off of eBay. I would recommend upgrading the ram, hard drives and batteries. We upgraded ours to 32GB of ram, 240GB Enterprise SSD (Mirrored) and added an extra set of RAID 5 hard drives. Which gave us an extra 300GB of storage space. The cost of this setup was done for less than $1,000.

Dell PowerEdge 1950 Specs

Microsoft Action Pack (AP)

Microsoft has this wonderful annual subscription that allows partners to receive $20,000 dollars of software for a small price of $475. No, we are not joking. The licenses come with a lot of restrictions and you aren’t supposed to use it on anything that generates a profit. We don’t condone that behaviour. However, the subscription does come with a $100 dollar Azure credit. Ideally, you are supposed to use this all internal or not for profit. In this case, you could design your product and let some clients help beta test and build it for free.

Microsoft Action Pack

Going Without the Action Pack Subscription

Forget it, Microsoft licensing is incredibly expensive, confusing and you won’t be able to upgrade. Plus, this is designed for the development box. The downside to purchasing licenses is that you’ll be stuck with the same version of SQL Server or Windows Server for about 5 years. The cost to upgrade is a huge burden and not worth it.

Price Comparison Over a Year

Specs Virtual Private Server (VPS) Microsoft Azure (A3) Colocation + AP
Cores 4 vCPU 4 8
RAM 4 GB 7 GB 32 GB
Hard Drive 100 GB 120 GB 500 GB
Bandwidth 650 GB First 5 GB / Month FREE
$0.087 per GB
10Mb/s of Bandwidth
Monthly Price $81.00 $267.84 $65.00


If you are willing to pray the price up front ($1,000 Server, $475 AP) you can get yourself a very nice development server. We estimate that this could be split up among 12 payments of about $120.00/month… So, the first year the web server could cost about $200/month or you could just pay cash. This is not a bad deal at all. In fact, with all of those resources you could have your friend donate money and get half the box. Let’s say they get half for $100/month. Then you are only paying about $100 dollars a month for an incredibly stout server. If you want this much power from Azure you would surely spend about $800 dollars a month. We think this is a great way to get started.

About The Author

Web Developer, Public Speaker and Internet Entreprneur

Colocation Development Server

by Jamie time to read: 3 min