Home Server vs. VPS – a quick Cost and Performance analysis

Which is cheaper: Running a server from home, or renting a VPS (Virtual Private Server)? We’re trying to pinch pennies where we can, and my son Derrick suggested upgrading an extra PC we have and running his Minecraft server at home. Would it save enough money to be worth it? I didn’t know the answer. The first task is to find out the cost of every little thing.

In one corner, we have the VPS at MyHosting.com. The VPS is an eight processor (its a VPS so its not counted quite the same as an 8 core processor) with 3GB ram and 20GB hard drive space. This is sufficient for the Minecraft server that my son Derrick runs. It costs $27.15 per month.

In the other corner, we have a Athlon 64 X2 4200+ (2.2 GHz dual core processor) with a 160GB SATA hard drive, and 3GB ram. To upgrade it from the 1GB to 3GB will cost $25. The next thing I had to figure out- how much will it cost to run?

I did some research, and came up with the following:
1) A system such as this one takes roughly 150w of power to run, at the most.
2) My local utility charges 6.6 cents per kilowatt/hr.

So, take those, and what do you get? Math.

Watts  x  Hours Used
—————————-   x  Cost per kilowatt-hour = Total Cost
1000
(Borrowed from http://michaelbluejay.com/electricity/computers.html)

So, plug in the numbers. There are 730 hours in the average month. Take 730 times 150 watts, divide by 1000 and you get 109.5 killowatt hours used, and at 6.6 cents per kw/hr that’s 722.7 cents, or $7.23/mo.

VPS: $27.15/mo or $325/yr
Home: $7.23/mo or $86.76/yr

Extrapolate that into a year, and that’s $238/yr saved! For that money, I can afford to replace the power supply or hard drive in the home server if it dies. Its a LOT cheaper.


Things not taken into account: If our home power or internet goes down, so does our server. Also, home IP numbers are prone to change now and then. For the simple gaming server, we can deal with that for $238/yr savings. On the other hand, my business website can’t afford to go down, and so a simple VPS with 512mb ram is plenty to run that. Those generally cost about $6/mo and are well worth the price.

Overall it is VERY cost effective for us to run the home server. Do some of the math and see- it just might be best for you too!

Not too long after this article first appeared, we had a change of plans! We moved to a new home that only has 1.5mbps DSL, and its not very fast… So what did we do? Check out this post, it goes into more detail.

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Updated: October 25, 2016 — 9:36 am

71 Comments

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  1. This is interesting to me. I’m currently moving a lot of stuff off a Linode VPS to a server here in my office. (My “server” is also an older desktop, but even older, a 3.2ghz single-core celeron with only 1.5gb ram and 150gb storage, but it’s for websites, not minecraft).
    I will be paying about $30 more for my internet, because in order for Xfinity/Comcast to allow hosting from home, I must “upgrade” to business class, but I’ll get unlimited bandwith, one static IP, and slight faster speed (from the 12/1 residential to the 16/3 business class speed).
    The VPS, with 4 cores, 2gb ram and 20gb storage costs me $60/month. So, if I add the $30 increase in internet with the c. $9 on electric (I’m paying c. 8¢/kwh), I’m still coming out ahead, at c. $40/mo, compared to the $60 for the linode. Not a huge difference, but I’m coming out with a lot more storage. I’m likely to increase the ram on this little box (will accomodate another 512mb, which is cheap. Currently has mismatched sticks, one 1024mb and one 512. Will add a second 1024 and chuck the 512mb).
    Eventually I’ll probably stick a new mobo in it with a faster cpu, and possibly add more storage, if/when that ever seem desirable.

    1. For my non commercial minecraft server, I won’t be violating any TOS. In fact I’ve seen comcast help people with port forwarding for minecraft servers. Mind you, they paid extra for that help, but nobody said they couldn’t do it.

  2. This cannot possibly come as a surprise. If all you are paying for is the electricity, it should trump VPS easily. If, however, you had to pay for the equivalent 8-core machine, the math would start to look different. Please don’t compare apples to oranges.

    1. However, with a VPS you aren’t getting that 8-core machine. You are getting a tiny tiny slice of that 8-core machine. Typically 1vCPU. And you are sharing it with 20-50 other VPS’s.

    2. It’s also worth pointing out that you truly are trying to compare apples to oranges. In most cases, when you host with a datacenter, you need to realize you aren’t simply paying for the electricity to be kept on, you are (probably) paying for hardware SLAs, network SLAs and guaranteed bandwidth rates, all while having your hypervisor professionally managed… all wrapped into one cost.

      Now, this sort of service level or redundancy may not be be a need for you, and is probably not required for a minecraft server where downtime may not be an issue, but it’s pretty tough to compare a home server to offerings of an ISP.

    3. I don’t think it’s apples to oranges. If the hosting service is charging you for things you don’t really need (99.999% uptime, redundant backups, SLAs, support at 3am, etc…) — if those are things you don’t need, then they aren’t part of the comparison. What he’s saying is, “These two things do what I want; this one costs less.” There, comparison finished. It’s not apples and oranges, it’s simple maths.

    4. The above reply

      “What he’s saying is, “These two things do what I want; this one costs less.” There, comparison finished. It’s not apples and oranges, it’s simple maths.”

      is exactly it.

  3. The flaw in your argument is the need for a VPS to run Minecraft. I personally rent minecraft servers and my pricelist starts at $9. I’m not the cheapest, but your savings are much smaller.

    1. I had to reply just because of your username. We tried the <$10 VPS's. They sucked.

    2. Right, but typically when you rent a Minecraft server, you aren’t getting a VPS. You are getting a managed server on pure hardware. It’s very easy to run multiple Minecraft servers on one box and/or one server that runs multiple instances. So for $9 minecraft hosting you get pure hardware, not a VPS.

      I thought about going into this business in the past, but I didn’t see how 20 customers at $9-$15 on one box (and that’s a lot considering you are setting up a game server and not just a web hosting machine) being rented for $300 would result in profit. But Beeblebrox figured it out and ultimately that is a pretty good price, assuming he hasn’t oversold his machines, thereby bottlenecking performance.

  4. It depends. Do you normally shut off your air conditioner during the day when no one is home? If yes then remember your home server is likely to be unhappy in a un-air conditioned environment. So you would also be paying to run your AC when you normally would not.

    1. I imagine this is only a concern in places where it would get _really_ warm inside your house. The server in question is just a regular desktop and shouldn’t have too much trouble in an 80+ degree ambient environment. I guess some of that depends on how taxing Minecraft is on the CPU though.

    2. It’s not, it’s taxing on your RAM

  5. Who said anything about 8 cores? You cant add oranges to his discussion of apples and then tell him not to talk about oranges.

    1. He said, and I quote “The VPS is an eight processor…”

  6. Good read Ryan! Maybe it would be useful to add other costs like internet and savings on heating due to the extra server running 😀

  7. I wonder what additional cooling cost / heat benefits you’ll receive.

  8. In my case, my savings really is $30/month, because, in truth, I’ve been running the little desktop/server at home, anyway, just as a file server. Now it will serve as my webserver. Since I’m already paying for the electricity, the difference is the $60 I pay for the VPS compared to the extra $30 I’ll pay for business class internet. $30/month in savings. $360/year. Not bad. This “server” is a refurbed eMachines I got off TigerDirect.com almost 6 years ago for c. $200, running Debian Stable (well had WinXP when I bought it, but that lasted for about 10 minutes once I got it out of the box).
    Good enough for hosting a personal website with a dokuwiki, piwigo and wordpress, plus my personal Friendica installation.

  9. Depending on your ISP (and your account) this may or may not be a violation of your Terms of Service. Many service providers don’t allow residential accounts to be used for dedicated hosting. Now, you’re probably not going to generate enough odd looking traffic to cause your service provider to dig deeper, but if your server does produce a lot of traffic for some reason you may well get a call and potentially have to change your account to a commercial one, change service providers, or simply stop hosting.

  10. You really need to make sure that you have the correct electric rates. Out here in the People’s Republic of California marginal rates can reach $0.34 per KWH. Even the lowest baseline rate (for a very small amount of usage is at $0.13/KWH.

    Not necessarily a killer, but it significantly changes the analysis.

    1. Yes — be sure to include delivery and other fees in your rates too! Here in the midwest I believe the quoted rate is ~8 cents, but after delivery it comes out to just over 13 cents.

    2. I’ll look into that. Gotta go bug the wife for a power bill.

  11. Consider a used netbook for a server if you have only light duty requirements. Mine works great as a hub for media storage/backups/etc and only uses a couple watts when idle!

  12. Why is your server always on? Why not set up Wake on Lan and only turn it on when needed?

    1. He mentioned using it as a minecraft server. It would need to be available to the internet for other to connect to it. IIRC WOL will not wake for someone off the internet trying to connect for a service like a game.

  13. Wooow so lucky. Here in Spain we pay the Kwh at €0.15 (cheaper home rate, government regulated). It change the final cost a lot.

    Other problem is that here we have ADSL (Asymmetric DSL) what means i.e 20 Mbps download, 1 Mbps upload. No option of better upload bandwidth if you’re not a datacenter. Optical fiber, cable, and other alternatives they are “Asymmetric” too. (Price between €40 to €80 per month)

    So… I had to drop the idea long time ago 🙁

    1. Yes that is a LOT more for power, wow. We have 30mbps down and 5mbps up, which is plenty for what we’ll need. Sorry to hear its so expensive for you though.

  14. Thanks for this article. I’ve done the same math myself and come to a similar conclusion, though as other commenters pointed out, my utility costs are a bit higher than yours. I’ve tried to make up some more of the difference by having the server (actually, mine’s a Minecraft server too) go to sleep when no one is connected. I’ve got a SheevaPlug on all the time that only uses a couple watts, and when someone needs to connect to the server, the plug wakes it up.

    Good to see some supporting evidence.

  15. Next do the math of replacing that 150Watt server with some kind of tiny, low power box. The Zotac ID61 retails for ~$200 and can run ~10Watts idle, ~20Watts under load and the dual-core Sandy Bridge @1.3GHz can run circles around your athlon, not to mention that it supports hardware virtualization, so you could run more than one server on it if you want. Newegg even had a deal a while back that bundled a 64G SSD into that $200 price and memory is less than $50. That would bring your power down to <$10/year. Versus the VPS it pays for itself in a year, vs the athon the additional HW cost is paid for w/in 3yrs by the power savings.

    1. Agree that the power savings of a current generation low-power box will pay for themselves in around 3 years. Not sure the Sandy Bridge Celeron will “run circles around” the Athlon X2, the ratings for the two CPUs are very close on passmark.com

    2. The analysis was based out current out of pocket expenses. I don’t have the cash to lay out for new equipment. If I did, I wouldn’t be as thrilled over a $20/mo savings 😉

  16. You can resolve the home ip changes with something like a free n-ip domain that can be configured to change the ip address when the ISP changes your modem’s ip. THis is how we run our minecraft server.

    Another thing that can be done to reduce the 7 bucks a month is you can analyze actual usage of the server and configure the BIOS to boot at a certain time of the day and the OS to shutdown at a certain time of the day. I do this with my NAS. This may add more wear and tear on the harddrive however compared to just running them full time. But if your users are in school or at work during the day and in bed by midnight or 2 am you can run a minecraft server 12 hours a day and cut the utility bill by roughly half.

    1. Thanks for the tips! I don’t think powering it on/off will work for us- too many users for that. But thanks for the idea! I am going to be looking at ways to throttle down the CPU when its not under load, and cut power consumption any way I can. It’ll probably be under 100 watts at idle. Probably under 75 even.

  17. Interesting analysis, Ryan.

    For those who wonder about heating & cooling costs, unless they’re specifically dedicated to the server, they’re not really relevant. For instance, if I ran a home server (I don’t run any sort of server anymore), I’d put it in the basement – where it’s a fairly constant 50-odd degrees Fahrenheit. But if I ran it in a typical American home, the cooling or heating is always on, but not always operating at full capacity. With whole-house HVAC systems, it’s not practical to consider the costs of turning it on and off for a server – it’s on to keep the house at a comfortable temperature.

    I also don’t think the technical specifications matter that much. Sure they’re different, but the actual dollar layout is more important. As long as the home server provides a reasonable response time, there’s no real reason to emulate what a VPS provides. In other words, it’s the job the server is expected to do not the actual hardware specification.

    Ryan has the hardware, and I presume depreciation isn’t even considered. For a business it should be, but for a hobby server, or a small home-based hobby business, it’s not usually included in any tax filing. Just that alone takes the whole exercise from one of economic planning to one of household financial planning – how much will Ryan’s son’s hobby server cost overall? Not much by the sound of it. As always, the cost of running a home server will vary depending on how much you pay for electricity; the other potential costs need to be considered only if they’re applied to server specifically. So Ryan isn’t comparing oranges and apples; he’s comparing how much money his son’s hobby server will take from his wallet. That’s an apples-to-apples comparison. 🙂

    1. thank you for a moment of reason, Carolyn. Some of the commenters on here seem to think that they can change the argument to THEIR particular needs and that then invalidates Ryan’s argument. His argument is based upon HIS needs. No one else’s. If you live in a place where electricity costs the same as two large elephants per day, then you would run YOUR comparison based upon that, Ryan’s comparison is based upon his costs, so is valid therefore for him. What he presented was HIS argument for HIM to make HIS decision.

    2. You nailed it. EVERYONE READ WHAT THE ABOVE COMMENTS SAID. I’m so glad that there are reasonable people!

  18. To get around the changing IP address issue… Register a domain name for yourself and use afraid.org as the DNS server. Your home router might/should have an option for DDNS (Dynamic DNS).
    When your home IP address changes it will automatically update afraid.org for you. There are some complications with setting it up. But when complete it is very reliable.

    1. We do have a domain, and our router does. I’ve used dyndns.org in the past for the same thing 🙂

  19. You are missing some numbers here and are not really comparing apples to apples. Are you taking server maintenance into account? Who is going to run/setup/admin/troubleshoot the server? How many hours a week does it take to maintain this server? Are you going to hire someone who can handle it, or take time out of another workers day? How much will that cost?

    1. I think Ryan is going to maintain the box. As he’s not likely to charge his son anything for that maintenance – his maintenance costs are zero for labor, and whatever the broken bit costs.

      The key to all this is “don’t think in terms of business costs.” Those costs are all-but non-existent in what I believe might be Ryan’s situation.

    2. Carolyn, you nailed it. As far as the whole apples-to-apples argument… you’ve completely missed the point. Its a HOBBY server, something we’re doing ourselves, and are very capable of doing. Who puts a monetary value on something a Father and Son do together? I do not.

  20. Watch out for upstream bandwidth. Minecraft is pretty hungry and very few domestic connections can actually handle the amount of data that a multiplayer server eats up. Domestic connections tend to be optimised for download speed instead.

    That’s the only part it falls down on. You’ll find your dedicated box hosted at home will have more storage, processor power, memory and so on than any VPS at anything like the same price. It’s just hamstrung by the upload speed of your internet connection.

    1. I am able to host minecraft on a netbook running WinXP or Windows Home Server V1 (2003 server), and have 2-3 players on at a time without issue. ISP is 20Mbit down, 1.5 Mbit upload, typical comcast cable connection.

  21. Your analysis is a good read, and I’d add only one more thing to it. Saving $238 per year, how many years will it have to run before you an replace the home server hardware?

    I see comments here and on slashdot claiming apples to oranges, and they have a leg to stand on. Most of those arguments are big business arguments (I doubt bandwidth is a big concern). I’ve been in similar situations and I think for home users with hobbyist needs your post is fair. Thanks for sharing.

    1. Probably by the time the server hardware needs replaced, another obsolete desktop will be available to replace it.

      At least that’s the way it has worked at my home for about 20 years now.

    2. Thanks James. Yes I saw those too- and they have a point, from a strictly business point of view. Mine is direct financial outlay for a hobby- not TCO and the whole nine yards.

      You make a good point about the hardware. Aside from my day job, I also do computer repair locally. People practically throw their old computers at me. Hardware is easy.

      Hard drives: You make another good point. Right now I’m short on hard drives, but the main config and world files (the meat of the Minecraft server) WILL be backed up to my VPS if nothing else.

  22. Interesting I have come to the same conclusion. These days with the high speed bandwidth and increased prices for a fixed IP it is better to actually run your own home server. Using a virtual machine on the Internet is expensive, and I mean really expensive.

    Though here are some gotchas that I have run into.

    1) Don’t run your email over your home server. It is not just about availability, but SPAM. Let somebody else do this and cough up the money.

    2) Buy a RAID USB harddisk or something like that. Backup all the time. Since you are running your machine 24×7 you are going to run into problems.

    3) Buy harddisks that can handle 24×7. Don’t just buy generic ones as they will die pretty quick. Another solution and one that I like, buy SSD’s. Quiet, and you can run, and run, and run these puppies. And since they are backing up to a RAID you have no worries.

    4) Run Linux… I have used OSX server and use it for my personal stuff. And have run Windows Server boxes. But Linux is the simplest. Easy to upgrade, update and keep current. I like Ubuntu server edition (even though I am not an admin).

    5) If you are running a business and cannot afford to have the website go down, then do the following. Find the cheapest web hosting and put up a rudimentary website. Use that site whenever you need to. Then for the extras use your home server. Works like a charm IMO… You can tie the email and website together for a fairly low cost.

    1. Of all the thoughtful replies, this one hit home as it matches what we do with our home server. I should note that my husband is a system administrator (although I do much of the maintenance!) and he is a Linux guy through and through.

      The bit about letting someone else host your email is way too true!

    2. Christian, I couldn’t agree with you more. I used to run several mail servers (and over 100 web/sql/dns servers) and what a huge mess that is. I went to gmail and never looked back. Google Apps can host it if I want @mydomain.com email, which I stopped caring about a long time ago. It will definitely be Linux, no doubt about that. I used admin Linux boxes for a living, and am quite proficient with it. The important stuff is still on a $6/mo VPS.

  23. Did the analysis for this a few months ago. Conclusion: VPS is the better option from a performance and uptime perspective. Comcast internet service has proven time and again to drop the ball when it comes to reliable internet service.

    Looking at Ryan’s choices, I re-ran the numbers again and with the VPS plans I’m on with prgmr.com vs the cost of switching my double play to a business tv+internet, the costs would be the same, except I would have slower network connectivity, have a black box view of the connection between my home host and the internet in general, and be subject to Comcast’s EULA(s). The internet would also be tied to my residence and if I had to move, would turn out to be highly disruptive.

    Setup:
    * 1 main VPS for LAMP stack, primary DNS services
    * 1 secondary VPS for secondary DNS services
    * Google Apps for all email handling.
    * Amazon S3 and home server for remote backups of VPS(s).

    Cost of VPS(s): $23/month(annual plan)
    Cost of S3 storage: $1.27-$2.50/month
    Cost of Google Apps Email: $0/month

    As others have pointed out, however, this doesnt’ have to be an either or. One can definitely back the VPS front end with a monster backend server at home or elsewhere in the cloud. But from a day to day uptime, performance, and convenience perspective, the VPS option won out.

    Now, to host/run a Minecraft server, I would definitely go with the home server option. Once you start getting more than 2-3 folks on a server, you REALLY benefit from more ram and fast disks. 🙂

    1. For uptime, VPS certainly wins, and is why my business website is on one still. Thank you very much for your detailed response!

  24. Accidentally I have measured a similar system yesterday, and it only eats 65W when idle. The proc is an AMD Phenom II X4 945, your processor has a lower TDP, but that does not mean too much, the more interesting would be the idle power, but I do not know that for either of the processors. I guess your server will rarely run on full load, so it seems you overestimated the consumption by a large margin.

    1. Yes that is true! I am expecting the actual cost to be much lower. But with CPU load high, disks active, and RAM being utilized, I would expect over 100 watts, and so thats what I calculated for: Worst case scenario. Even then, it worked out in my favor, which made it an even easier decision.

  25. Did you take into account your work hour for managing hardware ?

    1. No. This is for a hobby. Hobbies have their own expenses. I did this quick calculation for direct out of pocket expenses and nothing more. I’m also doing this with my son, so its educational for him, and in my eyes that doesn’t deserve to have a price tag or hourly rate put on it.

  26. I’ve invested in a very low power home server, drawing under 5w when idle and about 40w at peak.

    By the by, $27/mo for a VPS is madness. Go to lowendbox.com and get one of the better ones for $5/mo. For a minecraft server, a VPS won’t be as good because latency on your local network is way better. You also won’t have as much storage and the pipe to the VPS is likely to be an order of magnitude slower. But on economics alone – with your computer – VPS is way cheaper.

    1. We actually tried a VPS at a couple of the low end places that we found at lowendbox.com before spending almost $30/mo at myhosting.com. You get what you pay for. They are highly oversubscribed, latency was highly irregular, and downtime was common. Thanks for your response though, its still very much appreciated.

  27. If you want to figure out how much you would actually save with an upgrade- Consumer-grade power meters are available for US $15-30. “Kill-A-Watt” is one common brand.

    I have a firewall and a multimedia PC that are both “retired” game machines. I ran the firewall on the power meter for a week and discovered that it pulls a ton of juice 24/7. Given local electricity rates, I was able to spend $500 on a Soekris 6501 (expensive, but I had to have 4 gigabit ports, OpenBSD compatibility, and low power usage)- and know that it’d pay for itself in about 16 months. This upgrade saves me money, it’s much quieter, and it’s far less prone to hardware failure (bye bye, hard drives).

    The multimedia PC is on the power meter now- but I’m betting it will get replaced too, even though it sleeps most of the time, as its new hardware will be a lot cheaper than the firewall (I can use any old Atom board for that thing).

    On a related tangent, the Raspberry Pi is a very cool low-power toy that makes a great tiny home server for simple stuff (not for Minecraft, though). Check it out!

    1. I’ve seen the Raspberry Pi, looks like a great little device, but for our needs a full blown PC is in order. Minecraft is CPU intensive as well, so at least some heft is needed.

  28. You could use Dynamic DNS for the pesky IP changes… We have a free service that allows you to create a hostname that is static that would put to your IP address. When your IP address changes, your hostname is automatically updated with the new one, therefore no downtime. This would also be helpful for your website… If you want a custom domain you could even have No-IP Plus, which would let you create your own domain name and have up to 50 hostnames on it, all with dynamic DNS capabilities. you can check out all the products here: http://www.noip.com/free or http://www.noip.com/plusdns No-IP Free is, well Free, and the upgrade version of Free is Enhanced which is only $14.95 a year… Plus DNS is only 32.95 a year and includes domain registration… So all options are definitely affordable and won’t break your budget. Let me know if you have any questions or need help!

    -Natalie
    Marketing Manager
    No-IP.com

    1. Thank you very much! I am checking out no-ip.com right now. I do have a domain name I’d like to point at it, and I may end up rolling my own solution. Not sure yet. Yours is definitely under consideration though.

  29. One more tidbit to throw into the calculations: are you allowing the CPU to slow down during idle periods? Lower clock speed means lower wattage on the CPU, which also means lower thermal emissions, which also means slower fan speeds. A cascade of power savings.

    (But maybe that’s already accounted for in the numbers.)

    1. It is not. And, 150w is probably the high end of what it’ll use. My costs will probably be lower than $7/mo but I am one to estimate the high side of things when possible.

  30. I have been running my home server for several yrs and every time I try to look for a VPS i can’t find anything that shows any economical gain for me to move my setup. I also don’t run a business just a host of services that me and my family use. In my opinion it would make more sense to have the game server in your house and host your business on VPS as uptime is critical.

    1. Thanks for your response! Yes the business stays on VPS. For $6/mo its a no-brainer.

  31. This comment has been removed by a blog administrator.

  32. Hi! Will someone please explain the 1000 divisor?? I see no explanation for it at the original link in the top post which leads to “Mr. Electricity”. And yes, I *am* math challenged! Take Care. Have A Healthy, Prosperous Day!
    —rob

    1. Hi Rob, it takes it from Watt Hours to KILO (1000) Watt Hours. That makes it match the rate at which the electricity is charged. 109500 Watt Hours is good info, but we need to convert it to Kilo Watt Hours (KW/hr) which is how the power company sells it.

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