When a dedicated server becomes cheaper than a PaaS.

Every founder who has seen a $600 hosting invoice has done the same sum: a server with 64 GB of RAM rents for about $100 a month, so why pay six times that? The sum is right about the hardware and wrong about the total, because the PaaS invoice includes work that the server invoice leaves to you.

This page puts numbers on both sides for one small SaaS at three sizes. It is not a comparison of hosting models in general; for that, read PaaS, VPS or Kubernetes. For how each platform meters bandwidth and idle time, see usage-based vs flat PaaS pricing.

Render is the example because its prices are fixed per instance and easy to add up. The app is a web service plus Postgres. Bandwidth past the 25 GB in the Pro workspace costs $0.15 per GB. Render prices in US dollars; the CAD column uses the Bank of Canada rate for 2026-10-29, 1.3985.

OVHcloud rents dedicated servers in Beauharnois, Quebec, priced in Canadian dollars. The figures below come from OVHcloud’s public Canadian price catalogue, monthly billing with no commitment, before tax. Paying monthly, the setup fee equals one month’s rent; paying 12 months up front, it is zero. Hetzner is listed for contrast: it is cheaper, but its dedicated servers are in Helsinki and Falkenstein, so your data and your latency are in Europe. Its euro price is converted at the Bank of Canada rate of 1.5601.

A PaaS bill pays for things you stop noticing: someone else patches the operating system, replaces failed disks, runs the backups and gets paged at 3 a.m. On a server, each of those becomes a line you fill with money or with your own time.

• Your hours. Operating system and runtime updates, TLS renewals, reading logs, testing a restore, and the occasional incident. We assume 4 hours a month at level A, 6 at B and 8 at C, against 1 hour on the PaaS. These are assumptions, not measurements. Price them at what an hour of your time is worth; we use $100.
• Setup. Provisioning, firewall, reverse proxy, deploy scripts, Postgres tuning, backups and monitoring take 30 to 40 hours the first time, done carefully. At $100 an hour that is $3,000 to $4,000 before the first customer request.
• Off-site backups. A backup on the same machine is not a backup. Object storage elsewhere is cheap: Backblaze B2 lists $6.95 per TB a month. We allow $15 to $30 a month for backup storage and an external uptime check.
• A second machine. One server is a single point of failure: a dead disk controller or a botched kernel update takes the product down until you fix it. A standby server with Postgres replication doubles the rent. Some founders accept the risk and skip it; if you do, say so to your customers.
• Security patching. Unattended upgrades cover most packages. Kernel reboots, Postgres minor versions and your language runtime still need you, and a known CVE on an exposed service is your problem on the day it is published.

Both columns include time at $100 an hour. The server column includes two machines (primary and standby), backup storage and monitoring. It leaves out the one-time setup, which is handled below.

Strip the table down and one inequality is left. The server is cheaper when:

• With two servers at about $230 a month, 5 to 7 extra hours at $100 and setup spread over 24 months, the PaaS bill has to pass roughly $900 to $1,100 a month before the server wins.
• Drop the standby machine and the threshold falls by its rent, $43 to $104. The saving comes from the downtime you accept.
• Value your time at $0 and the server wins at level A. That is true only if those evenings have nothing better to do, which is rarely the case for someone also selling, supporting and building the product.
• Hours do not shrink with scale the way people hope. Bigger databases make restores slower and upgrades riskier, so the 8 hours at level C is a low estimate for many teams.

PaaS bill − server bill  >  (server hours − PaaS hours) × hourly rate
                            + setup cost ÷ months you'll keep it

For most small software companies the server becomes cheaper later than expected, somewhere past a $1,000 monthly PaaS bill, and the deciding number is your hours, not the rent. Before that point, the cheaper move is usually to shrink the PaaS bill: right-size instances, put files behind a cache, and pick a platform whose price doesn’t grow with every gigabyte.

That last option is the middle path. A flat-priced platform such as Canner charges $9 a month for Live, in Canadian dollars, with 1 TB of traffic included, a dedicated Postgres instance for $9 a month per project and App RAM at $4 per GB a month; plans and limits has the details. It runs one process per project in one region, Montréal, with no failover, so it suits the same small products the table describes and not a system that needs several regions.

If you do move to your own servers, we wrote up what changed when Canner moved from virtual servers to its own hardware. More guides for small software companies are on the hub page.