Over five years, two company servers cost about the same in the office, in colocation or rented as dedicated servers: 23600 to 24400 EUR in our example. The same workload in a large public cloud comes to about 32300 EUR with 3-year reservations and about 43100 EUR pay-as-you-go. All figures exclude VAT and licences. Between the first three options the gap is smaller than the uncertainty in any assumption, so the decision rests on downtime risk, effort and what happens in year six. Every number below has its source or assumption next to it, so you can replace ours with your own.
The example is a company with 20 to 50 people that runs one application and database server (accounting, ERP or CRM with its SQL database) and one file server. Prices were checked on 27 September 2026. If you already know the servers have to move, see how we move company servers to our Riga data centre.
The workload and the ground rules
- Server A, application and database: 4 cores with 8 threads, 16 GB of RAM, about 500 GB of mirrored SSD.
- Server B, files: 2 or more cores, 8 GB of RAM, about 1 TB of usable storage.
- Period: 60 months at today's prices, excluding VAT, with no inflation.
- Left out on purpose: Windows Server, SQL Server and access licences, which depend on your agreement rather than on where the server stands, so budget them separately. Also left out: the office network and everyday administration of the system and applications, which is the same work wherever the servers run.
Assumptions and sources
| Item | Value used | Source |
|---|---|---|
| New entry-level 1U server with a 3-year warranty | 3500 EUR each | Our assumption; a vendor configurator gives your real figure |
| Warranty extension for years 4 and 5 | 500 EUR per server | Our assumption |
| Rack UPS plus one battery replacement | 700 + 250 EUR | Our assumption |
| Air conditioner for the server cupboard | 1500 EUR installed | Our assumption; drop it if the room is already cooled |
| Average power draw | 100 W per server | Our assumption, moderate load |
| Cooling and UPS losses in an office | +50 percent on top of the servers | Our assumption |
| Electricity | 0.1641 EUR/kWh | Eurostat nrg_pc_205: non-household consumers in Latvia, 20-499 MWh a year, second half of 2025, excluding VAT (below 20 MWh: 0.245 EUR/kWh) |
| Hardware and facility work on top of normal administration | Office 2 h, colocation 1 h, cloud 1 h, dedicated 0.5 h a month | Our assumption |
| Cost of one hour of that work | 50 EUR | Entry rate of our IT support, or your own staff cost |
| Backup with a copy off site | 83.51 EUR a month in every option | Azure Backup list prices: three protected instances at 8.59 EUR plus 1500 GB of geo-redundant storage at 0.0385 EUR per GB, one neutral figure for all options |
| Second internet line for the office | 25 EUR a month | Our assumption; needed once the servers leave the building |
The four options
1. Servers in the office
Two new servers with the warranty extension cost 8000 EUR, the UPS and the air conditioner another 2450 EUR. The servers draw 200 W, and cooling and UPS losses add 50 percent: 2628 kWh a year, 431 EUR a year or 2156 EUR over five years. Two hours a month of hardware and facility work adds 6000 EUR. At the end of year five the hardware is worn out and the cycle starts again.
2. Your own servers in colocation
The same servers and warranties (8000 EUR) go into our Riga data centre at the public price of 40 EUR a month per 1U server: 80 EUR a month for two, 4800 EUR over five years. Installation, a public IPv4, a 1 Gbit/s uplink and 30 TB of traffic a month are included, and electricity is billed by meter on top. Our price per kWh is not on the public price list, so we used the same Eurostat rate as for the office, applied to the servers alone: 1752 kWh a year, 1438 EUR over five years. The UPS, the air conditioner and the office overhead drop out, because the facility has a double-conversion UPS backed by a diesel generator. One hour a month of hardware work remains (3000 EUR): firmware and ordering spare parts, which our engineers fit on site. Every other line of a colocation bill, from extra IP addresses to BGP and a second power feed, is explained in colocation pricing in Riga 2026.
3. Rented dedicated servers
Two Dedicated Start servers in Riga (Intel Xeon E3-1230 v5 with 4 cores and 8 threads, 16 GB of RAM, 4 × 450 GB SAS) cost 130.05 EUR a month each on 12-month terms, 15606 EUR over five years, with no setup fee: the one-time setup fee of one monthly base price (153 EUR per server) applies only to a 1-month term and is waived on 3, 6 and 12-month terms. Two 500 GB SSD add-ons for the database, 7.50 EUR a month each at list price and 6.38 EUR with the same 12-month discount, add 765.60 EUR. Power, cooling and hardware repairs are inside the price; half an hour a month (1500 EUR) remains for you. This is an older processor generation; if server A outgrows 16 GB of RAM, the next configuration in Riga, Enterprise Start, costs 407.15 EUR a month on a 12-month term.
4. A large public cloud
Microsoft Azure, region Sweden Central, list prices in EUR from the Azure Retail Prices API, retrieved on 27 September 2026. We used Linux rates so that no licence hides in the price; Azure's Windows rates are higher because they include the Windows Server licence. A month is 730 hours.
| Item | Per month |
|---|---|
| Server A: D8ls v5 (8 vCPU, 16 GiB), 3-year reservation | 86.70 EUR (pay-as-you-go 228.20 EUR) |
| Server B: D2s v5 (2 vCPU, 8 GiB), 3-year reservation | 25.26 EUR (pay-as-you-go 63.95 EUR) |
| Disks: P10 and P20 Premium SSD for A, E10 Standard SSD and S30 Standard HDD for B | 131.19 EUR |
| VPN Gateway VpnGw1 and its public IP, to connect the office | 122.20 EUR |
| Outbound traffic: 300 GB, of which the first 100 GB are free | 14.94 EUR |
| Total | 380.29 EUR (pay-as-you-go 560.48 EUR) |
Over five years that is 22817 EUR with reservations renewed at the same price for years four and five, or 33629 EUR pay-as-you-go. A VPN on a small virtual machine of your own costs less than the gateway, and is one more machine to look after. One hour a month (3000 EUR) covers cost checks, reservations, and network and backup settings.
Five-year totals
| EUR, 60 months, excl. VAT | Office | Colocation | Dedicated | Cloud, reserved |
|---|---|---|---|---|
| Hardware and warranties | 8000 | 8000 | 0 | 0 |
| UPS and cooling | 2450 | 0 | 0 | 0 |
| Colocation, rent or cloud resources | 0 | 4800 | 16372 | 22817 |
| Electricity | 2156 | 1438 | included | included |
| Hardware and facility work | 6000 | 3000 | 1500 | 3000 |
| Backup with an off-site copy | 5011 | 5011 | 5011 | 5011 |
| Second internet line | 0 | 1500 | 1500 | 1500 |
| Total | 23617 | 23749 | 24383 | 32328 |
Pay-as-you-go cloud would total 43140 EUR. Read the totals as ranges: move the server price by 1000 EUR or the work by one hour a month, and the order of the first three changes. The cloud gap comes mostly from disks and the VPN gateway, not from the virtual machines.
Downtime: the line we left out of the table
Downtime is where honest numbers are hardest, so here is the arithmetic instead of a guess. If 30 people lose half their productive time while the servers are down, and an hour of their time costs the company 30 EUR each, one hour of downtime costs about 450 EUR. Eight extra hours a year then cost 3600 EUR a year, or 18000 EUR over five years: more than the difference between any two options above.
- Office: one power feed, a UPS that lasts minutes, no generator, spare parts on the next business day, nobody on site at the weekend. On the other hand, a broken internet line does not stop the people in the office.
- Colocation and dedicated servers: power, cooling and the network are the data centre's job, but the office internet line becomes critical, hence the second line in the totals. And a single server still stops when a part fails, until the part is replaced.
- Cloud: hardware failures are handled for you, but regional incidents happen, and one virtual machine without a second one in another zone is still one machine.
When each option makes sense
Keep the servers in the office when you have a proper room with cooling, a UPS and someone on site who looks after it, when people work with very large files over the local network or machines on the shop floor talk to the server directly, or when the internet line cannot be improved.
Choose colocation when you already own servers with several years of life left. The hardware line then disappears from both the office and the colocation option, both fall to about 15600-15700 EUR, well below renting, and colocation gives you the data centre's power, cooling and network for about the same money as the office. It also fits when you need specific hardware or run more than a few servers.
Rent dedicated servers when you do not want to spend capital or deal with hardware and warranties, the load is steady and fits a catalogue configuration, and you would rather have the hardware refresh in year six be the provider's problem.
Use a large public cloud when the load changes a lot, a project is short, you need managed services or several regions, or your team already works in that cloud every day. Reservations pay off only for steady workloads, and cloud storage and traffic grow with your data.
How CloudHosting can help
CloudHosting SIA runs its data centre in Riga itself and offers both the colocation and the dedicated servers used in this comparison, with monitoring and incident response 24/7 and engineers who answer on working days 9:00-17:00 Riga time. As the totals show, we are not the cheapest choice in every case. Send your own figures through the contacts page and we will go through the comparison with you, or read how a migration to our data centre runs. If your servers still run Windows Server 2016, start with its end of support on 12 January 2027.