A server’s location is an operational decision, beyond its address. An in-house server room, Austrian colocation and a hyperscaler region can run the same business service. What differs is who operates buildings, power, cooling, networks, hardware and access, how costs change and what recovery route exists after an outage. A data centre in Austria may meet a specific customer requirement; the GDPR does not impose a general obligation to store all company data in Austria.
The DAXS overview of operating models explains cloud, on-premises and hybrid. The article on actionable monitoring alerts covers response. Here we consider location selection for the same fictional ERP service with transparent costs. The figures are freely chosen net assumptions, neither DAXS quotes nor prices from a named operator.
First make the technical requirement equivalent
The fictional business operates a small ERP environment comprising two virtual machines with eight virtual cores in total, 32 GiB RAM and two terabytes of production data. It needs encrypted access from the corporate network, monitoring, daily backup in a separate fault domain and two restore exercises each year. All three options model only one production site and no second system that takes over automatically. Workload stays constant for five years; a real load test must replace this sizing assumption.
Management wants no more than one day of data loss and, if possible, a usable process within eight hours. These are review objectives for backup and continuity planning, not achieved or committed RPO/RTO values. A complete site outage can take longer under this simple architecture. Anyone requiring a firm eight-hour commitment must add a second recovery route, its costs and exercises to every option. A hyperscaler region alone does not guarantee application high availability either.
Who is responsible for each operating task?
In an in-house server room, the business is responsible for building conditions, access, power, cooling, fire and water protection, networks, hardware and platform. Colocation moves the building and agreed infrastructure to the data-centre operator, while the customer retains its server hardware and many operating tasks. Rack work then requires contractual access or Remote Hands; it carries no blanket response commitment. Digital Realty publicly describes colocation sites in Vienna and Remote Hands services, but availability, power density, networking and service hours must be clarified in each quote.
A hyperscaler removes your own rack and hardware work, while configuration, permissions, keys, virtual system operations, backup and business recovery remain. The exact responsibility boundary depends on the service: a rented VM requires more customer operation than a more managed platform. AWS explicitly describes this as shared responsibility. To compare fairly, this example assumes virtual infrastructure only; a particular managed service may have different functionality.
| Task | Own server room | Colocation in Austria | Hyperscaler |
|---|---|---|---|
| Building, power, cooling | Business | Operator under contract | Cloud provider for its infrastructure |
| Hardware and on-site access | Business | Customer hardware; clarify access/Remote Hands | Cloud provider for its hardware |
| ERP, access and backup | Business or appointed IT provider | Business or appointed IT provider | Customer according to the selected cloud service |
| Business acceptance after restore | Business department | Business department | Business department |
Austrian data location and data processing agreement
A physical location in Austria can be decisive for confidentiality, short distances, customer contracts or sector requirements. For personal data, however, roles, processing agreements, subprocessors, technical measures, access locations and possible third-country transfers must also be examined. The European Data Protection Board explains that transfers outside the EEA have separate conditions under Chapter V of the GDPR. An Austrian rack does not make processing automatically compliant; an EEA cloud region is not automatically prohibited. Specific data-flow and contract assessment belongs in the project.
The quote should record production data, backups, logs, administrative access and support routes separately, with region and owner. A migration or exit plan also needs an export format, deletion procedure, deadlines and testing. A price figure does not replace these points.
A transparent three- and five-year calculation
Every option uses the same assumed internal fully loaded rate of €80 per hour. Two annual restore exercises of eight hours each cost €1,280 per year in every option. Prices, workload and wages remain constant in the calculation; taxes, financing, residual value, hardware replacement after year five and second-site costs are excluded. The own-room option includes only in this model necessary building improvements. Neither colocation nor the hyperscaler carries a blanket availability commitment.
| Option | One-off | Annual | 3 years | 5 years |
|---|---|---|---|---|
| Own server room | €14,000 hardware + €9,000 room + 40 × €80 migration = €26,200 | Power/cooling €4,200 + network €1,800 + maintenance €2,400 + backup €2,400 + 8 h/month operations €7,680 + exercises €1,280 = €19,760 | €85,480 | €125,000 |
| Colocation in Austria | €14,000 hardware + €1,800 setup + 40 × €80 migration = €19,000 | Space/power €6,600 + network €3,000 + Remote Hands budget €1,200 + maintenance €2,400 + backup €2,400 + 6 h/month operations €5,760 + exercises €1,280 = €22,640 | €86,920 | €132,200 |
| Hyperscaler infrastructure | 90 × €80 migration and checks = €7,200 | Compute/storage €7,800 + network/transfer €2,400 + backup €3,000 + monitoring/security €1,440 + 5 h/month operations €4,800 + exercises €1,280 = €20,720 | €69,360 | €110,800 |
Each total follows One-off amount + years × annual amount. For example, assumed colocation costs 19,000 + 5 × 22,640 = €132,200. The Remote Hands budget of €100 per month explicitly guarantees neither attendance nor response time. The hyperscaler’s monthly compute and storage budget is an assumption of €650, not a tariff derived from a price list. Egress, backups, network paths and additional regions can shift the calculation substantially.
Sensitivity: If hyperscaler compute and storage increase by €250 per month, five years rise by €15,000 to €125,800, putting the model slightly above the own-room option. Conversely, its five-year value falls by €9,000 to €116,000 if genuinely suitable room infrastructure already exists and no new upgrade is needed. If it also needs only six rather than eight operating hours per month, the model falls by another €9,600 to €106,400. These changes show why the table supports no blanket “cloud is cheaper” or “colocation is safer” conclusion. Availability and recovery must be assessed separately through actual contracts and exercises.
Which questions belong in the tender?
Require the same workload values, backup objectives and test records for all three options. The own room needs measurements for power, temperature, access, fire/water protection and cable routes. Colocation needs a rack/power/network quote, access rules, Remote Hands scope and spare-part procedure. For the hyperscaler, include each service’s region, data flows, network/egress costs, roles, backup and an exit test. In every option, the business department ultimately decides whether the ERP transaction is usable again after an incident.
DAXS can assemble the shared workload assessment, location and contract matrix, and restore and exit tests for a specific project. Contact DAXS.
Sources: EDPB: international data transfers · EDPB: controllers and processors · AWS Well-Architected: shared responsibility · Digital Realty: colocation sites in Vienna · Digital Realty: Remote Hands.
