In-House vs. Outsourced

The economics of In-House operations versus outsourcing can be compelling, as shown in the following table:

	In-House Hosting on Your Premises	DedicatedSystems Windows Web Server

Initial Costs:
Windows Server with Software	$6,000	included
Router/CSU/DSU	$4,000	included
UPS Back-Up	$600	included
Set-up, labor	$2,000	$495
Total Initial Costs:	$12,600	$495

Monthly Costs:
Service technician	$4,000	included
High Speed Connection	$1200	included
Backup Generator	$$$$$$$$$$$$	included
Server Rental (prepaid monthly)	$0	$595
Total Monthly Costs:	$5,200	$595

First Year Cost:	$75,000	$7,635


Three Year Cost:	$199,800	$21,915

The above cost differential is certainly worth considering.

Notes:

Windows Server assumes a reasonably-sized Web server computer running Microsoft Windows NT or 2000 operating system and Microsoft Internet Information Server (IIS), a mail system, a statistical package, an FTP server, and all the other needed items to make it a complete unit.
Router/CSU/DSU reflects communications equipment required to connect to the Internet.
An Uninterruptible Power Supply (UPS) is required to guard against damage to programs and files if there is an electrical outage.
A backup generator is required for longer period power outages.
Set-up and labor assumes that you contract with someone to connect all the hardware and install the operating system and other programs.
Maintenance costs are what you'll end up paying a skilled person to monitor the server and perform other routine maintenance such as data backups, disk maintenance, etc..
Connection cost is assumed to be the monthly charges from your provider to provide a line of suitable capacity for connecting a Web server to the Internet.
Forester Research states that the average company will spend $70,000 or more annually to provide their own in-house internet server.

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