We manage about 30 websites that use shared ASP.NET SQL Server web hosting. These are typical small/medium business websites and they perform fine in this environment.

Recently I was looking at VPS hosting in this thread http://serverfault.com/questions/128329/how-do-you-host-multiple-public-facing-websites-on-a-vps

After contacting a provider in one of the replies I was told that VPS hosting is not recommended for 30 sites, even if they are small. The resource requirements might be too great even for VPS. So I should turn to dedicated hosting.

The lowest cost dedicated hosting is $219 per month (see http://www.serverintellect.com/dedicated/pentiumdservers.aspx). But this is only for a single processor which seems too light for a machine running both IIS and SQL.

In our office all the developers work on quad cores so I assume I’d really need the Quad Processor. However, this starts at $599 monthly.

Now, I won’t be able to transfer all of our 30 sites to this machine. I’d only be able to transfer say 5 or 6. However, moving forward, I’d be able to host all future sites on this machine. This amounts to 4-5 per year.

Let’s look at the economics. Shared hosting costs are typically $16.95 monthly (see http://www.crystaltech.com/dotnet.aspx). So here’s the dilemma

First months costs: $599 First month revenue: 6x$16.95 = $101.7 Loss in first month: $497.3

First year costs: $599x12=$7188 First month revenue: 6x$16.95x12 + 5x$16.95x6(averaged) = $1728.9 Loss in first year: $5459.1

Clearly it is going to take years for this server to pay for itself. It just doesn’t seem economical!

Am I missing something here, or is dedicated not the way to go with the amount of sites we build?