Why growing tech companies are rethinking the cost of cloud infrastructure

Back in 2018, choosing a host for a new product could take about five minutes. You opened an AWS account, or used Google Cloud or Azure depending on the team, launched an instance, and got back to writing code.

Five years and a Series A later, the same decision can look rather different.

Nobody sets out to overspend on servers. The increase is usually gradual. A managed database here, additional snapshots there, a month where outbound traffic rises because a customer starts pulling reports every hour. Eventually, the infrastructure bill becomes large enough to attract attention from finance teams.

There has been a resurgence of interest in physical servers for some growing technology companies. That has led to a closer look at an option that had become less popular during the public cloud boom.

Cloud computing is certainly not obsolete. There are many clear use cases for it. The question is whether every workload must have the same infrastructure model.

With stable and predictable workloads, more and more organisations are questioning whether they need a cloud infrastructure.

There has been renewed interest in bare-metal hosting, especially among Web3 companies, SaaS companies, and AI and gaming companies.

Where Cloud Infrastructure Starts to Become Complicated

The first year of a technology business is usually about survival and product development. Infrastructure efficiency may sit below customer acquisition, product improvements and hiring on the priority list.

The calculation changes as the business grows.

The Bill Nobody Planned For

Cloud providers charge users based on what is used. Often this makes the bill difficult to understand because charges are broken down by the smallest components of the service used.

By themselves, the component charges are not particularly high. The problem comes as demand for the service increases.

37Signals and Dropbox show large, predictable workloads can be moved away from public cloud infrastructures. They do not show that using the cloud is a bad decision. The moves show infrastructure economics can shift as a company moves from an exploration phase to an established, growth phase.

Performance and Consistency

Cost is not the only factor to consider.

For a workload where performance consistency is a concern, the underlying hardware does make a difference. Virtualisation abstracts the underlying hardware from the customer, and while this is an excellent concept for most workloads, it does provide less control over the hardware for the customer.

Something like a marketing website may never notice a difference. Game servers, blockchain nodes, and latency-sensitive applications would probably care a lot more about performance consistency.

This is one of the reasons many Engineering teams are looking into dedicated infrastructure along with their existing cloud infrastructure.

What Is Bare-Metal Hosting?

In a traditional virtual environment, a single physical server is split up into many virtual machines. Each customer effectively rents a virtual machine, but the hardware is shared amongst all the tenants.

In contrast, bare metal hosting means that a customer rents an entire physical server. This provides greater control over the hardware and operating system resources. Traditionally, to configure a bare metal server, a customer had to fill out a lengthy service ticket to provision the server. Recently, customers can adjust resources and provisioning on bare metal servers similar to the cloud.

Hostphase is one example of this model. The company provides dedicated physical servers as well as virtual infrastructure, with facilities in the United States and Hong Kong. Its service illustrates how the traditional dedicated-server model has increasingly adopted the automation and flexibility associated with cloud platforms.

The distinction is therefore becoming less straightforward than “cloud versus dedicated server”. For many businesses, the practical question is which type of infrastructure should handle which workload.

Bare Metal vs Public Cloud, Side by Side

Bare metal and public cloud solve different infrastructure problems, so the comparison depends heavily on the application.

Why consider dedicated hardware again? One reason is that the historical disadvantage—slow provisioning—has become less significant.

Modern providers can automate much of the ordering and deployment process. That means businesses can retain more control over physical infrastructure without necessarily returning to the manual processes associated with dedicated servers in the past.

Why Some Engineering Teams Are Looking Beyond Public Cloud

The decision is rarely about finding a universal replacement for AWS, Google Cloud,d or Azure. Instead, engineering teams often look at specific workloads and ask whether another infrastructure model makes more sense.

Predictable Workloads

A continuously running application can be easier to plan for than one with extreme peaks and troughs.

If a service requires approximately the same amount of computing capacity every day, paying for infrastructure that remains available can sometimes make more sense than relying entirely on usage-based services.

This is particularly relevant to established SaaS products, databases, game servers,rs and other always-on applications.

Hardware Requirements

Some workloads benefit from direct access to powerful CPUs, large amounts of memory, fast storage, or GPUs.

AI applications are an obvious example. GPU availability and pricing have become important considerations for teams building and running machine-learning workloads, particularly when capacity is needed consistently rather than for occasional experiments.

Dedicated hardware can also be relevant to blockchain infrastructure, rendering, high-performance computing,g and other specialised workloads.

Bandwidth Considerations

Network traffic is another part of the infrastructure equation.

For businesses transferring significant volumes of data, outbound traffic can become a material cost. This is particularly relevant to streaming services, data-heavy SaaS products, software distribution platforms and applications serving large files.

In these situations, infrastructure decisions need to consider not just compute capacity but also network requirements and the total cost of moving data.

Where Dedicated Servers May Fit Best

There is no single workload profile that makes dedicated infrastructure automatically better. The strongest candidates tend to be applications with relatively stable demand and a clear need for consistent resources.

Web3 and Blockchain

Blockchain infrastructure can place significant demands on processing power, storage,ge and network performance. Validators and RPC services may therefore benefit from predictable hardware resources.

However, requirements vary significantly between networks and applications, so infrastructure should be selected according to the workload rather than the label “Web3” alone.

AI and GPU Workloads

AI teams are another potential use case if the model requires a GPU to run continuously. For an organisation regularly running training or inference workloads, it could be more cost-effective to either purchase or rent GPU capacity and manage that infrastructure instead of constantly provisioning cloud resources.

However, there are a number of other factors to consider, including utilisation, model size, and the capacity requirements as well as how comfortable the team is managing the infrastructure.

Gaming, Streaming, Trading and SaaS

Some businesses rely more on cloud computing resources than others, and game studios are definitely in the game computing-reliant camp. They need to minimise latency and have consistently performant servers. For streaming businesses, storage and bandwidth are the most important factors, and trading applications may focus more on the network and computation resources. SaaS businesses are usually somewhere in the middle. Their workloads may be stable enough to utilise dedicated resources, while also utilising cloud resources for databases, backups, and development environments, as well as for sudden traffic increases.

Why Data-Centre Location Matters

The location of a business’s infrastructure can also affect the experience of end users.

For example, a business primarily serving Asia-Pacific customers would have different latency considerations from a business serving customers in North America and Europe.

It is especially relevant for London-based and other UK technology businesses. For example, when considering a hosting environment, a business has to evaluate where its users are located.

Hostphase’s presence in Hong Kong provides one example of how geographic placement can be part of an infrastructure decision. When serving users across East and Southeast Asia, distance may be more important than choosing the cheapest cloud provider.

Additionally, businesses that need to meet European data residency, compliance, and/or redundancy requirements may need infrastructure in additional data center regions. Location needs to be analysed with cost and performance in mind, rather than in isolation.

What Businesses Should Consider Before Moving Away From the Cloud

Dedicated hosting can be advantageous; however, removing workloads from a public cloud provider’s infrastructure means the customer is then responsible for the workloads.

Where are Your Users?

Where your customers are is where you should plan your infrastructure to be. A provider with only a few regions may not work for a company that needs wide geographic coverage.

Who Will Manage the Servers?

More control generally means more responsibility.

Operating-system updates, security patches, monitoring, backups, and incident response may require internal engineering resources or external support.

How much do applications rely on the cloud?

Applications that utilise a virtual machine to run their code might not have a difficult time migrating.

A distributed application utilising several cloud services (eg serverless functions, managed relational and/or NoSQL databases, queuing and stream services, etc.) would be difficult to migrate.

How Does Your Workload Look?

Steady, predictable workloads are easier to plan for with dedicated capacity.

The truth is, really unpredictable traffic favors public cloud infrastructure because elasticity is one of the major reasons companies choose public cloud services first.

That is why a lot of organisations end up with a hybrid model rather than opting for one model solely.

A Pragmatic Instance of the Hybrid Approach

 A business may have its primary application servers on dedicated hardware while using cloud infrastructure for development, backups, or times of peak traffic.

Using this approach provides a more predictable and steady infrastructure cost while still using a cloud service.

Hostphase, for example, provides both dedicated and virtual infrastructure, like many hosting providers, showing a trend in the industry to integrate various hosting models instead of viewing them as separate models.

The most important thing to remember here is that the infrastructure architecture needs to follow the workload. A predictable workload, like a database, may not need the same kind of infrastructure as an unpredictable workload, like a marketing campaign.

How Teams Can Test a New Infrastructure Provider

Not all companies need to migrate everything at the same time when considering a change.

• An initial assessment can include an evaluation of the current infrastructure bill.
• Identify costs associated with compute, storage, network, and managed services.
• Identify workloads that are predictable and services that have fluctuating levels of traffic.
• Identify and benchmark an application that is representative of the services provided, and include the level of latency and throughput that you expect.
• Consider the overall reliability and support commitments of the services.
• Move a representative service and monitor the migration.
• Rather than relying on statements of throughput and latency, measure and benchmark them yourself.
• The focus should be on reliability, support commitments, and performance, rather than relying on marketing materials and headline prices.

Four Common Myths About Bare Metal

Myth 1: “Bare Metal Doesn’t Scale”

Dedicated infrastructure requires more planning than elastic cloud resources, but businesses can combine physical servers with virtual infrastructure and additional capacity where necessary.

Myth 2: “Dedicated Servers Take Weeks”

The traditional procurement process could be slow. Automated provisioning has reduced that barrier for many modern hosting providers.

Myth 3: “Only Large Enterprises Need Dedicated Servers”

Smaller companies can also benefit when they have predictable workloads and enough infrastructure demand to justify dedicated resources.

Myth 4: “The Cloud Is Always Cheaper”

Public cloud can be highly cost-effective for many applications, especially during early development or periods of unpredictable demand. For steady, resource-intensive workloads, however, dedicated infrastructure can sometimes produce a different and more predictable cost profile.

Where Infrastructure Is Heading

The industry is moving away from the idea that every workload has to follow exactly the same infrastructure strategy.

The term “cloud-smart” is increasingly used to describe an approach in which companies select infrastructure according to workload requirements rather than automatically putting everything on one platform.

AI is contributing to that discussion because specialised computing resources can be expensive and capacity can be difficult to plan. Web3 infrastructure creates another set of performance requirements, while established SaaS businesses are increasingly interested in understanding the long-term cost of always-on workloads.

For London and other major technology hubs, the same question is relevant: how should growing companies balance speed, flexibility, performance,e and infrastructure costs as their products mature?

The answer will vary from business to business.

Final Thoughts

The renewed interest in dedicated infrastructure is not necessarily a rejection of public cloud. It is a sign that infrastructure decisions become more nuanced as technology companies grow.

Cloud platforms remain valuable for rapid development, managed services, global rea,ch and unpredictable demand. Dedicated servers can provide another option for businesses with stable workloads, specific hardware requirements or significant data-transfer needs.

Providers such as Hostphase are part of that changing infrastructure landscape, offering dedicated and virtual options for organisations that want more control over how their workloads are hosted.

For a growing technology company, the most useful question may therefore not be whether cloud or bare metal is better.

It is whether the infrastructure model matches the workload.

That means looking at actual usage, geographic requirements, staffing, performance targets and total cost over time before deciding where a particular application should run.

Frequently Asked Questions

What is bare-metal hosting?

Bare-metal hosting provides a complete physical server to a customer rather than placing the workload on shared virtualised hardware. It can offer greater control and predictable access to physical resources.

Is bare metal cheaper than public cloud?

It can be for certain steady and resource-intensive workloads, but there is no universal answer. Public cloud may be more economical when demand changes significantly or when managed services reduce operational work.

When should a company consider dedicated servers?

Dedicated infrastructure can be worth evaluating when workloads are consistently active, require specific hardware, or generate significant network traffic.

Is public cloud still useful for companies using dedicated servers?

Yes. Many businesses use a combination of dedicated infrastructure and public cloud services. Cloud resources can handle development, backups, managed services, or temporary increases in demand.

What should businesses consider before moving to dedicated infrastructure?

They should evaluate workload stability, geographic requirements, security, backup arrangements, staffing, migration complexity,y and the total cost of operating the servers.

Where does Hostphase fit into this infrastructure model?

Hostphase is an infrastructure provider offering dedicated physical servers and virtual infrastructure. It represents one example of the wider market of providers serving businesses that want alternatives to relying entirely on hyperscale public cloud platforms.

Does every growing technology company need bare-metal hosting?

No. The appropriate infrastructure depends on the company’s workload, budget, technical resources, geographic requirements,ts and growth pattern. For many businesses, a combination of cloud and dedicated infrastructure may be more practical than either option alone.

For companies evaluating their infrastructure strategy, the most useful starting point is not the name of a particular provider. It is a clear understanding of what the application actually needs, how those requirements are likely to change,nge and which infrastructure model can support them sustainably.