What is Hosting Model Cost Comparison?
A self-managed vs managed hosting comparison evaluates total costs including server fees, maintenance time, downtime risk, and scaling capability.
The Formula
Self-Managed TCO = Server Cost + (Admin Hours × Hourly Rate) Managed TCO = Monthly Fee (includes support + maintenance)
Worked Example
A web application: self-managed VPS $80/month + 10hrs admin, or managed hosting $250/month.
- Self-managed: $80 + (10 × $50 dev rate) = $580/month
- Managed: $250/month (includes maintenance, security, monitoring)
- Self-managed true cost: 2.3x managed price
- Managed frees 10 hours/month for product development
📌 Managed hosting saves $330/month in true costs while freeing developer time for revenue-generating work.
Why This Matters
Developer time
Self-managing servers consumes 10-20 hours monthly. At developer rates, this hidden cost often exceeds managed hosting fees.
Uptime reliability
Managed providers guarantee 99.9%+ uptime with 24/7 monitoring. Self-managed averages 99.5% without dedicated ops staff.
Security
Managed hosts handle security patches within hours. Self-managed servers often run weeks behind on critical updates.
Common Mistakes
❌ Comparing sticker prices
A $20 VPS looks cheaper than $200 managed hosting, but admin time makes self-managed 3-5x more expensive.
❌ Undervaluing downtime
Each hour of downtime costs businesses $1,000-10,000 in lost revenue. Managed hosting pays for itself in avoided outages.
❌ DIY at scale
Self-managing 1 server is manageable. At 10+ servers, the complexity requires dedicated DevOps staff costing $80K+/year.
Industry Benchmarks
| Category | Good | Average | Poor |
|---|---|---|---|
| Solo Developer | Managed (focus on code) | PaaS (Heroku/Vercel) | Self-managed VPS |
| Small Team | Managed or PaaS | Self-managed with IaC | Manual server management |
| Uptime SLA | 99.95%+ | 99.9% | Below 99.5% |
Source: Hosting Tribunal Infrastructure Survey 2025
Benchmark data sourced from Hosting Tribunal Infrastructure Survey 2025.