Managed hosting vs. doing it yourself: the real cost comparison

The comparison most people make is "$5 VPS versus $99 managed plan", and on that comparison managed hosting looks absurd. It is the wrong comparison. The server is the cheapest part of hosting a business website. Everything else is time, and time is either yours, an employee's, or a contractor's at an hourly rate.

What a server needs, every month, whether you do it or not

Here is the list of work that a production web server requires. None of it is optional in the sense that skipping it has no consequence; it is optional only in the sense that the consequence arrives later.

• Operating system patching. Security updates ship weekly. Some require a reboot. Some break things.
• Application patching. CMS core, plugins, themes, language runtimes, database engine. The CMS updates are where most small-business breaches come from.
• Backups. Configuring them is one evening. Checking that they still run, that they are off-site, and that a restore actually works, is a recurring job that almost nobody does until the day they need it.
• Monitoring. Something has to notice the site is down before a customer does. Then something has to wake a human.
• TLS and DNS. Certificates renew automatically until the one time they do not. Domains auto-renew until the card expires.
• Performance. Caching, image sizes, database bloat. Sites get slower every month by default.
• Security. Firewall rules, brute-force protection, malware scans, and reading the logs after something odd happens.
• Incidents. The server fills its disk. The plugin update breaks checkout. A bot finds the login page. These happen at the worst time by definition.

Putting hours against the list

We asked our own engineers to estimate what a competent generalist, not a specialist, spends on a single WordPress or similar site on a self-managed VPS, averaged over a year. These are deliberately low.

Six and a half hours a month is a conservative figure for a single site. At a modest $60 per hour for an in-house generalist's fully loaded time, that is $390 per month on top of the $5 server. At freelance rates for an actual systems engineer it is more. If the person doing the work is the business owner, the hourly rate is whatever the owner's time is worth, which is usually the highest number in the company.

What managed hosting actually buys

A managed plan replaces that list with a flat fee and a team whose entire job is the list. Specifically, a good managed provider gives you:

• Patching done on a schedule, tested on staging first, with rollback.
• Backups that are off-site, encrypted and restored on a schedule to prove they work.
• Monitoring that pages an engineer, with a written response time.
• Security tooling that a single business could not justify buying alone: web application firewall, DDoS mitigation, vulnerability scanning.
• Someone accountable when something breaks, with credits in the SLA if they are slow.

What it does not buy, and you should check this, is ownership of your own infrastructure. The warning sign is a provider that registers your domain in their name or hosts your site on an account you cannot log into. See point 15 of our security checklist.

When DIY is the right answer

Self-managing is a perfectly good choice when at least one of these is true:

• The site is a hobby, a personal blog or an experiment, and downtime costs nothing but pride.
• You already employ a systems engineer who has spare capacity and is actually doing the list above.
• You are a developer and the operational work is something you enjoy and will keep doing after month three.

Be honest about the third one. Most self-managed servers are well maintained for the first ninety days.

When managed hosting pays for itself

Managed hosting is the cheaper option when the site makes or supports money, when nobody on the team is a systems engineer, or when the cost of a day offline is higher than a month of the plan. For most small and mid-sized businesses all three are true.

A simple test: write down what one full day of your website being offline costs you in lost sales, leads and staff time. If that number is higher than the monthly price of a managed plan, you already have your answer.

How to compare managed providers

Once you have decided on managed, the price comparison is still not the point. Ask every provider the same five questions:

1. Is my resource allocation dedicated, or am I sharing a server with hundreds of other sites?
2. How often are backups taken, where are they stored, and when did you last restore one?
3. What is your written response time, and what happens if you miss it?
4. Are the domain, DNS and hosting accounts in my name?
5. What exactly does "managed" include? Ask for the list in writing.

Our own answers to those questions are on the hosting page and in the SLA. Whoever you choose, get theirs in writing too.