Server Procurement Guide: Buy, Rent or Use Cloud?

Organizations typically procure new hardware to address evolving business requirements or to refresh existing IT infrastructure components. The goal of server procurement is to successfully integrate new equipment into the environment to increase processing capacity or add new functionality. Companies may need new hardware and software to remain competitive in their market sector.

The primary stakeholders and budget owner in a server procurement project may vary based on the organization’s size. In large companies, the CIO or IT managers may oversee new equipment purchases. They may need to get buy-in from the finance department when calculating the budget. Business owners are typically more involved in smaller companies and may control nearly the entire procurement process. In almost all cases, the server’s users are major stakeholders who will benefit from strong performance.

This article compares purchasing a server and housing it in a colocation facility or on-premises data center with renting or paying a subscription fee for provisioned hardware from a third-party vendor, usually a cloud service provider (CSP).

Assess Current IT Infrastructure

The first step decision-makers should take is to assess their current IT infrastructure before purchasing new servers. In some cases, existing hardware can meet the business requirement driving the procurement process. A complete inventory makes the environment easier to manage.

The assessment should cover the following points.

• Inventory all existing servers and supporting components. This includes on-premises and cloud resources for a complete picture of the infrastructure.
• Measure current workloads and gather detailed performance metrics to determine the additional capacity needed to meet future business needs. Teams should verify that this capacity is not available by simply reorganizing the server population.
• Map all application and service dependencies to ensure environment changes will not break critical processes. New servers must integrate efficiently with existing equipment to deliver high performance after deployment.

Define Server Hardware Requirements

After determining that server procurement is necessary to meet business needs, teams must define server hardware requirements. Businesses should model these requirements using a specific workload or application as a guide. The compute power needed to support a content delivery network, ecommerce site, or AI model training varies widely.

The following hardware specifications are essential to deliver the right solution, whether the server lives in-house or is rented from a cloud provider.

Processor: The first choice is the CPU architecture, for example, x86 versus ARM. Teams must procure a server with the proper number of cores and clock speed to handle the prospective workload. Higher clock speeds support individual tasks, while more cores help parallel or distributed processes.

Memory: Calculate memory capacity based on the OS, applications, and the typical number of VMs and users. Servers may need faster, but more expensive, DDR5 memory to handle specific workloads. Expansion slots and additional drive bays for memory upgrades may be important and should be considered.

Storage: The server must have enough storage capacity for data, logs, backups, and to support growth. SSDs or NVMe storage offer better performance for high I/O workloads, while HDDs are more cost-effective and suitable for archives. Consider higher RAID levels to improve data integrity, redundancy, and performance.

Network: The number and speed of network interfaces can be critical for some applications. Teams must provision a server that can handle the expected peak throughput and has redundant NICs to ensure reliable availability.

Consider additional requirements when purchasing a server for in-house use. Teams must ensure the facility has the necessary power and cooling capacity to integrate the new server into the environment. This may influence the server’s form factor, for example, whether it can be incorporated into existing racks. These factors are essentially irrelevant when procuring a server from a CSP.

Assemble The Procurement Team

Organizations should assemble a dedicated procurement team if one does not already exist. The business owner, CIO, or another company decision-maker should lead the team. If needed, include an additional financial approver to keep the project on budget. The team should also include an IT infrastructure architect to ensure the new server integrates smoothly with no business disruptions.

Choose The Right Server Solution

Once the specifications are defined, the procurement team and business leaders must choose the right server solution to meet them. At this point in the server procurement process, the organization must decide. They can build a server and house it in a colocation facility or an on-premises data center. They can also rent a server from a CSP, which shifts some costs and responsibilities to the vendor.

Building A Server

Companies that build a server need to consider the form factor that best fits their current infrastructure while meeting performance and storage requirements. They may be able to obtain the same functionality from a rack, blade, or tower at substantially different price points.

Teams should prioritize flexible solutions with defined upgrade paths to support evolving business needs. The server should offer scalable memory and storage for future growth. Consider hardware warranties and support tiers, which may vary widely between vendors.

Renting A Server

Organizations do not need to consider items such as form factor or cooling capacity when renting a server from a CSP. Teams can select the server based solely on performance and functionality. Eliminating other characteristics may allow a company to obtain a higher-quality solution for its business needs with a cloud-based solution.

Tco

Decision-makers may need to calculate total cost of ownership (TCO) to justify the investment. This can be straightforward with a cloud partner that offers transparent fees. A company should be able to accurately estimate the yearly cost of running the server and allocate the necessary funds to support it.

Teams researching an in-house solution have additional factors that contribute to the server’s TCO. Infrastructure upgrades cost money and can substantially increase the price of housing the machine. Organizations may need to hire employees with specific technical skills to perform maintenance and ensure the server addresses its expected business objectives.

Procurement Process And Vendor Management

Once the procurement team is assembled, the next step is to prepare bids for prospective hardware or service vendors. As with choosing the right specific server, this process depends on whether the company purchases or rents the equipment.

In both cases, the company should prepare a request for proposal (RFP) that defines the server’s hardware and performance requirements. When dealing with a CSP, the request covers not just hardware, but also additional support services.

Companies should compare hardware or service quotes from at least three vendors. In some cases, organizations may have to choose between cost and performance when choosing a vendor. These choices must be made by senior management or major stakeholders.

Vendor Comparison Checklist

Teams can use the following checklist when comparing vendors.

• Can the vendor commit to the requested CPU, storage, and memory allocation for server purchases and rentals?
• Is the vendor financially stable and well-regarded in the market?
• How long will it take after contract signing to deliver the machine or provision it in the cloud? Typical delivery windows are four to eight weeks, so planning is essential to meet capacity needs.
• Will the vendor verify the commitments in writing and provide proof of concept for similar services?
• Are spare parts available for the hardware? This may be more important for in-house servers. For example, companies may want last-time-buy options for components when a server reaches end of life and ceases vendor support.

Contracting And Pricing Strategies

Companies planning to invest in new server procurement need a clear understanding of their options. These vary based on whether you purchase or rent the equipment.

When a business purchases the server, it should insist on a return clause if it does not meet specifications. Teams should not accept inferior equipment. The contract may also include an upgrade path, allowing the customer to take advantage of future hardware improvements. Customers may also want consulting services to help troubleshoot issues.

If they are working with a cloud partner, the business should investigate multi-year contracts for allocation security and potential cost savings. The provider should offer an upgrade path, perhaps for an additional fee, so that clients can keep up with technological advancements.

Logistics, Deployment, And IT Infrastructure

The choice between purchasing and renting the server affects the plan and how quickly the organization can use its processing capacity. CSPs typically have available systems and can fill an order promptly. It’s simply a matter of finding the vendor that can provision the servers you need.

The logistics are more complicated with an in-house installation. Teams may have to perform some or all of the following tasks.

• Confirm the chosen server is available from the vendor and obtain a guaranteed delivery window.
• Plan necessary infrastructure upgrades such as installing additional racks, power supplies, and cooling capacity.
• Schedule the server’s deployment, focusing on minimizing any operational disruptions during equipment installation.

Risk Management, Timing, And Inventory

A key part of the server procurement process is assessing whether the equipment can meet future business needs. Consider the following specific issues when evaluating the risks of purchasing a server. Renting a server for a set timeframe can reduce some of these issues, since it can be easily replaced.

• Teams must assess the risk of server components becoming obsolete.
• Companies may need to take measures such as stockpiling DDR4 memory to replace worn components for legacy systems.
• Organizations investing in multiple servers may benefit from a phased procurement to conserve capital expenditures for future capacity needs.
• Teams must identify suppliers that can replace critical parts if they fail.

A CSP handles most of these issues when a business rents a server.

Post-Procurement And Lifecycle

After the server procurement process is complete, the customer should assess whether it meets business requirements. The following measures can help evaluate success and maintain critical business applications.

• Fully document all procurement decisions and configuration baselines to guide future purchases or provisioning.
• Implement complete monitoring to verify the machine meets performance expectations.
• Introduce a proactive maintenance policy to keep the server running optimally.
• Incorporate the new server into quarterly capacity reviews to develop future procurement plans.

Final Thoughts On Server Procurement

Companies must use their IT budgets efficiently. Companies must adopt new technology to remain competitive in today’s challenging business market. Server procurement is often necessary to meet goals, but companies must fully evaluate the choice between purchasing and renting equipment. In many cases, partnering with a CSP offers a more flexible way to scale capacity to meet business needs.

A reliable CSP can become a trusted business partner and help a company grow efficiently. Atlantic Net offers customers a full line of cloud, dedicated, and bare metal servers that provide advanced technical capabilities to address virtually any business need. Their offerings feature high-performing GPUs for compute-intensive AI training and ML models, as well as solutions for streamlined e-commerce platforms. They offer customers a straightforward path toward obtaining the processing power they need.