Dedicated servers for startups: are they cost-effective?

Dedicated servers are often associated with highly demanding and specialized tasks, leading many to believe they are a solution reserved for giant tech companies—especially when it comes to the term "bare metal."

The reality is far more nuanced. Like many other products, dedicated servers come in various formats, specifications, and price points. What remains consistent, at least among top providers, is their robustness and reliability.

By the end of this article, you'll have a clearer understanding of whether a dedicated server is the right fit for your workloads, regardless of your company's size.

In case you already know, sign up on Latitude.sh and start building.

Common dedicated server use cases

Dedicated servers are versatile solutions that power a wide range of industries and applications.

Their performance, reliability, and scalability make them indispensable for businesses with demanding workloads.

Below are some of the most common use cases, with real-world examples of companies leveraging dedicated servers to drive innovation and success:

Cybersecurity

In the cybersecurity field, real-time data processing and airtight security are essential.

Companies like Acronis use dedicated servers to deploy advanced protection against malware, ransomware, and other evolving threats.

Latitude.sh has helped Acronis establish and scale its operations in Brazil. Acronis provides a comprehensive cybersecurity platform, offering backup, disaster recovery, and data protection solutions.

These servers enable secure backups, real-time threat detection, and data encryption, ensuring that client data is always protected.

The high performance and control provided by bare metal servers also allow cybersecurity firms to meet stringent compliance requirements and offer their customers peace of mind.

Data Extraction

Organizations involved in data extraction and analysis need infrastructure capable of handling large-scale web scraping and processing workloads.

Zyte, a trailblazer in web data extraction, relies on a globally distributed server network powered by dedicated servers to collect and process vast amounts of data efficiently.

These servers offer customizable configurations, enabling businesses to scale operations and meet the growing demand for actionable insights.

With dedicated resources, data extraction companies like Zyte can process information rapidly and reliably, delivering high-quality data to their clients.

Education

Educational platforms have unique challenges, such as supporting a large user base, offering interactive content, and ensuring uptime during peak usage.

Studio Sol, a leader in Brazil's app market, uses dedicated servers to manage high volumes of data and user interactions.

For almost 20 years, Studio Sol has been enabling access to quality music websites and apps, serving 5 million daily users.

These servers provide the scalability needed to support online courses, multimedia content, and real-time assessments.

The reliability of dedicated infrastructure ensures that students and educators can access resources without disruptions, fostering effective learning experiences.

Gaming

The gaming industry demands low latency, high-speed connectivity, and reliable performance to provide seamless experiences for players.

Gamer’s Club, the largest esports community platform in Brazil, uses dedicated servers to ensure smooth gameplay and minimal interruptions for its users.

Founded in 2015, Gamer’s Club provides 128-tick rate (# of times it updates in a second) servers and its own anti-cheat system, offering a fair and seamless gaming experience.

Whether hosting multiplayer games or esports events, dedicated servers deliver the computational power and network stability necessary to support large-scale concurrent connections.

Gamers expect consistent, lag-free performance, and bare metal infrastructure meets these demands even during high-traffic periods, ensuring player satisfaction.

Streaming

Streaming services like MUBI rely on dedicated servers to provide high-quality, uninterrupted content delivery to users around the globe.

MUBI, a platform dedicated to independent and arthouse cinema, enables people to watch, discover, and discuss films beyond the mainstream.

With increasing competition and user expectations for instant playback and high-definition streaming, dedicated servers are critical for managing traffic surges and ensuring smooth performance.

These servers also allow platforms to deliver region-specific content by integrating with global data centers, optimizing user experiences across different locations.

Web3 and Blockchain

Web3 companies such as eOracle are at the forefront of decentralized applications and blockchain technology.

eOracle is both the largest AVS on Eigenlayer and the largest Oracle network overall, operating with 130 validators and $10 billion in staked ETH.

It specializes in secure, transparent data aggregation and verification, enabling real-world information to be reliably recorded on the blockchain.

Dedicated servers play a vital role in maintaining distributed ledgers, processing blockchain transactions, and managing decentralized networks.

The computational power of bare metal infrastructure ensures that these systems remain secure and perform efficiently, even as blockchain adoption grows.

Across these diverse industries, dedicated servers empower businesses to tackle complex challenges, deliver exceptional user experiences, and scale their operations effectively.

Their versatility and reliability make them an indispensable asset, regardless of the workload or company size.

The cost benefits of dedicated servers

When considering server solutions for your business, it’s essential to weigh the options available.

The two most common choices are dedicated servers—which we’ve explored in depth—and the public cloud, where a single server is divided into multiple virtual machines (VMs) used by various tenants.

Dedicated Servers vs. Public Cloud: Key Differences

The core distinction between these two lies in ownership and access. With a dedicated server, a single user or organization gains exclusive access to the entire server's resources, providing:

Unmatched raw processing power, enabling the execution of intensive workloads without sharing resources. Enhanced customizability, allowing for tailored configurations to suit specific requirements. Higher security standards, as the server operates in isolation, free from the risks posed by multi-tenant environments.

By contrast, public cloud environments prioritize flexibility and scalability but often come with hidden costs, especially as usage scales.

The Cost Misconception

A common misconception is that dedicated servers are inherently more expensive than their shared cloud counterparts.

On the surface, this assumption might appear valid; after all, a private server seems like a premium solution. However, the reality is far more nuanced.

While the initial cost of a dedicated server might seem higher, the long-term savings—especially for businesses with consistent, high-demand workloads—can be substantial.

Understanding Ingress and Egress Costs

To truly grasp the cost benefits of dedicated servers, it’s important to understand two critical terms:

Ingress: The traffic that flows from the internet into your server. Egress: The traffic that leaves your server and is sent back to the internet.

Most providers, especially in the public cloud space, offer ingress generously or even at no additional cost. Egress, however, is a different story. Once you surpass the allocated egress limit, costs can skyrocket.

For businesses transmitting large amounts of data, egress fees can quickly become a financial burden. This challenge is a common tipping point for organizations transitioning to dedicated servers.

Real-World Insight: The Egress Dilemma

Latitude.sh customers frequently cite egress costs as a key motivator for leaving the shared cloud. For instance, Juliano Souza, Cloud & DevOps Manager at Neon Labs, shared his experience:

“We were incurring high costs of egress traffic by transmitting large amounts of data to the blockchain, so decreasing lock-in within AWS and GCP became a priority as our operation was scaling up.”

Juliano’s story highlights a critical advantage of dedicated servers: predictable costs. Unlike the fluctuating bills often associated with public cloud providers, dedicated servers provide businesses with clear and transparent pricing models.

Predictable Costs with Dedicated Servers

With top-tier providers like Latitude.sh, businesses benefit from:

Fixed rates for egress and free ingress: You know exactly how much data you can transmit and how much it will cost if additional bandwidth is needed.

Customizable billing options: Providers offer flexible plans, allowing businesses to choose between hourly, daily, weekly, monthly, or annual billing. This flexibility ensures companies can align server costs with their operational needs.

More Than Just Cost Savings

While cost savings are a significant advantage, dedicated servers offer much more:

• Scalability: Businesses can easily upgrade their server specifications as their needs grow, without the limitations imposed by shared infrastructure.

• Performance: With exclusive access to hardware resources, dedicated servers deliver unmatched computational power for demanding applications.

• Reliability: The isolated nature of dedicated servers reduces the risk of downtime caused by resource contention or noisy neighbors in shared environments.

A Strategic Investment for the Future

For entrepreneurs and established enterprises alike, dedicated servers often represent a strategic investment rather than an operational expense.

They provide the performance and stability required to scale operations while keeping costs predictable and manageable.

As businesses grow and their data needs expand, many discover that dedicated servers are not only cost-effective but also offer the performance and reliability necessary to maintain a competitive edge.

Are dedicated servers overkill for small businesses?

By now, it should be clear that dedicated servers are good solutions no matter what the size of your company is.

A lagging website or a slow-loading application can lead to lost customers and diminished brand reputation in any area nowadays.

Cybersecurity is also no longer a concern exclusive to large enterprises. Small businesses may just as well be targeted by cyberattacks, as they are often seen as less prepared.

Dedicated servers address these concerns by offering isolated environments. Unlike shared hosting, where multiple tenants share the same infrastructure, dedicated servers operate in isolation, significantly reducing the risk of cross-contamination from compromised accounts.

Moreover, dedicated servers allow businesses to implement custom security protocols, such as firewalls, encryption, and access controls, tailored to their specific requirements.

This is especially important for companies handling sensitive data or operating in regulated industries, as dedicated servers make it easier to comply with stringent standards like GDPR or HIPAA.

Neon Labs is a real-world example of how dedicated servers can solve critical challenges. The company faced escalating egress traffic costs while transmitting large amounts of data to the blockchain.

By transitioning to a dedicated server, they not only reduced costs but also gained greater control over their infrastructure, enhancing security and scalability.

Also, small businesses don’t stay small forever. A dedicated server provides a scalable infrastructure that grows with the business.

Resources like CPU, RAM, and storage can be upgraded easily as the business’s needs evolve.

Unlike shared hosting or public cloud services, where scaling often involves complex migrations or steep cost increases, dedicated servers offer a straightforward path to expansion.

Additionally, many providers offer flexible billing options, from hourly and daily to monthly and annual plans.

This allows small businesses to align server costs with their budgetary constraints and operational cycles, making dedicated servers accessible and adaptable for businesses of all sizes.

Dedicated servers are versatile and can power various small business operations. For e-commerce businesses, they ensure high performance, secure transactions, and reliable storage of customer data.

Media production companies benefit from the ability to store and deliver large files quickly and reliably. Gaming startups can provide low-latency gaming experiences for their users.

For tech startups, dedicated servers enable the development, testing, and deployment of applications in a controlled, high-performance environment.

For example, previously mentioned Studio Sol, a leader in music applications, relies on dedicated servers to deliver seamless user experiences to millions of users daily.

Even small-scale app developers can ensure consistent performance and reliability by investing in dedicated server infrastructure.

The digital transformation of businesses is accelerating, and small businesses that invest in robust infrastructure now will be better positioned to adapt to future challenges.

Dedicated servers provide the foundation for running advanced technologies such as AI workloads, blockchain applications, and big data analytics.

They also support global expansion by enabling businesses to connect to global data centers and deliver region-specific content efficiently.

By investing in dedicated servers, small businesses gain the resilience needed to handle traffic surges, evolving customer demands, and potential cyber threats.

Dedicated servers with Latitude.sh

Choosing the right infrastructure for your business can feel overwhelming, especially when terms like “bare metal” and “dedicated servers” seem tailored for tech giants.

But at Latitude.sh, we believe powerful tools aren’t reserved for large enterprises—they’re essential for businesses of all sizes.

Our offerings are designed with accessibility, scalability, and cost-efficiency in mind, making them as valuable to small businesses as they are to global corporations.

Take our 24/7 specialized support, for instance. Whether you're managing a simple website or running complex applications, having expert assistance whenever you need it ensures your operations run smoothly.

No issue is too small, and our team is here to help every step of the way.

With 20 TB of free outbound traffic every month and free inbound traffic, small businesses can scale without worrying about unexpected data transfer costs.

For those whose operations rely on transferring data to and from applications, this translates into predictable, manageable expenses—a must for growing companies.

Unmetered DDoS protection and our 99.9% uptime SLA aren’t just features—they’re lifelines. Cyberattacks and downtime can hit any business, no matter the size.

Our robust protection ensures your operations stay secure, while our uptime guarantee means your customers can always count on you to be available.

We also provide bandwidth reporting, allowing you to monitor and optimize your usage with ease.

Add to this IPMI access for remote server management and a user-friendly dashboard and API, and you have full control of your infrastructure, whether you’re tech-savvy or just getting started.

What sets Latitude.sh apart is that all these features apply across every model we offer, from the compact yet capable c2.small.x86 (6-core CPU, DDR4 memory and SSD) to the high-performance rs4.metal.xlarge (64-core CPU, DDR5 memory and ultra-fast NVMe).

Whether you need just enough to get started or the power to handle demanding workloads, our platform adapts to meet your needs without unnecessary expenses.

Investing in a dedicated server isn’t about spending more—it’s about spending smarter.

With tools and features designed to empower businesses of every size, Latitude.sh makes it easier than ever to harness the power of dedicated infrastructure.

It’s time to rethink what’s possible for your small business. Let us show you how.