Where to Source Servers, IPs, and Bandwidth for Your Startup
Every modern startup, SaaS, AI platform, gaming backend, media streaming, or security provider, relies on infrastructure. Yet very few founders understand how infrastructure evolves as a company scales. They start with a VPS, later realize they need dedicated servers, and eventually discover that to control costs and reliability, they need their own IP space, ASN, and direct relationships with carriers for IP transit.
This journey from “renting compute” to “owning infrastructure” isn’t just about cost optimization. It’s about control.
Control over performance.Control over routing.Control over your future scaling costs.
Infrastructure growth follows a predictable path. The most successful companies (Cloudflare, Vercel, Discord, DigitalOcean) all followed it.
Below is the roadmap.
Stage 1: Renting a Dedicated Server
"Fastest way to launch without commitment"
Most startups begin with:
- Public cloud (AWS, Google Cloud, Azure)
- Or a rented dedicated server (OVH, Hetzner, Hivelocity, etc.)
This stage is about speed. You need to ship fast, validate the product, and avoid capital expenditure.
Advantages:
| Benefit | Explanation |
|---|---|
| No upfront cost | You pay monthly and can cancel anytime |
| Instant deployment | You can deploy in minutes |
| Managed environment | Power, cooling, networking handled for you |
But the downside emerges quickly:
- Cost increases linearly as you scale
- Performance is affected by noisy neighbors (cloud / shared DC resources)
- You have no control over routing, peering, or network paths
It works, until you grow.
Stage 2: Buying Your Own Hardware
"Stop renting. Start owning."
When infrastructure is your biggest cost line (SaaS, gaming, AI workloads), owning hardware becomes significantly cheaper than renting.
Example:
| Configuration | Renting (average market price) | Owning (colocation + amortization) |
|---|---|---|
| Dual CPU server | $250–$400/month | $40–$120/month (capex amortized over 3 years) |
Buying hardware means:
- Lower operating cost long term
- Higher compute performance (enterprise-grade machines)
- Customization (storage, NVMe tiers, GPUs)
You still don’t control networking. Your provider assigns IPs, ASN, and routing.
Which brings us to the next step.
Stage 3: Colocation
"Move your servers into a data center."
Instead of paying a hosting provider monthly for their rack, you rent space and power directly from a data center.
You ship your server, or the data center installs it for you.
What changes:
| Responsibility | Previously | Now |
|---|---|---|
| Hardware | Provided by hosting provider | You own it |
| IPs and routing | Provided by hosting provider | Optional/transition stage |
| Network decisions | Hosting provider | You decide eventually |
Colocation gives you:
- Your own physical presence (PoP)
- Lower long-term cost vs dedicated server rental
- Power and cooling SLAs directly from the source
Most data centers also provide “blended bandwidth” (multiple carriers aggregated), which is enough at the beginning.
But at some point, you want to optimize routing. Which leads to…
Stage 4: Getting an ASN (Autonomous System Number)
An ASN allows you to operate as an independent network on the internet. With an ASN you can:
- Advertise your own IP prefixes through BGP
- Multihome (connect to multiple carriers)
- Build direct peering relationships at IXPs
- Migrate data centers without changing IPs
This is the step where you stop acting like a customer of hosting companies and start acting like a network operator.
Requirements to get an ASN:
- A business or organization registered (LLC, corporation, etc.)
- An IP block (IPv4 or IPv6) or an LOA showing you control one
- Justification for why you need BGP routing (redundancy is reason enough)
Regional registries:
| Region | Registry |
|---|---|
| North America | ARIN |
| Europe + Middle East | RIPE NCC |
| Asia-Pacific | APNIC |
| Latin America | LACNIC |
Stage 5: Obtaining IP Space (IPv4 + IPv6)
You now need an IP prefix to announce via BGP.
Types of IP ownership:
| Type | Ownership | Portability | Good for |
|---|---|---|---|
| Provider-assigned | No | No | Early stage |
| Provider-independent (PI space) | Yes | Yes | Growth stage |
| Small / large IPv4 blocks (market) | Yes | Yes | Scaling stage |
IPv6 is free via RIR membership.IPv4 must usually be purchased or leased due to shortage.
Startups today often begin with leasing a small block (/24 IPv4). Later, they acquire more.
Stage 6: Buying IP Transit
"Your first direct relationship with the internet."
Until now, someone else (data center, hosting provider) gave you bandwidth.With an ASN and IP space, you are ready to buy IP transit.
IP transit gives you:
- A BGP session with a carrier (Tier-1 or Tier-2 network)
- Ability to announce prefixes from your ASN
- Redundant routing through multiple networks
This is where performance becomes measurable.
Example:
Traffic from your server → transit provider → global internet
Startups evaluate carriers based on:
- Latency performance
- Path optimization
- DDoS risk surface
- Price per Mbps
- Geographic reach
Tier-1 carriers (NTT, Lumen, Telia, GTT, Zayo) offer global reach.Tier-2s or regional networks offer lower pricing and more flexibility.
As your network grows, you multihome.When one provider fails, traffic automatically shifts to the other.
Stage 7: Peering at IXPs
IP transit sends traffic through upstream carriers.Peering exchanges traffic directly with other networks.
Instead of:
Your ASN → transit provider → Google
You can do:
Your ASN → peering exchange → Google
Advantages:
| Benefit | Result |
|---|---|
| Lower latency | Fewer hops |
| Lower cost | Free (settlement-free peering) or low yearly fee |
| Better user experience | Faster routing, especially for gaming/VoIP |
Peering is what made Cloudflare and Netflix dominate performance worldwide.This is how platforms deliver sub-10ms response time.
Most startups discover that a decent percentage of their traffic can be exchanged via peering instead of paid transit.
Stage 8: Global PoP Expansion
"Repeat the model in multiple data centers."
At scale, startups duplicate:
- Racks in multiple data centers
- Their ASN routing policy
- Peering and transit strategy
You go from 1 PoP to 3, then 10, then 40.
This is how companies evolve from:
“One rented server” to “global anycast network”.
A Realistic Growth Path for a Startup
Here is a simplified progression:
| Stage | Cost | Complexity | Ownership Level |
|---|---|---|---|
| Renting a dedicated server | Low | Very easy | None |
| Buying hardware | Medium | Easy | Hardware |
| Colocation | Medium | Medium | Hardware + space |
| ASN + IPs | Medium | Medium | Identity + address |
| IP Transit | Medium / High | Advanced | Routing |
| Peering (IXP) | Low | Advanced | Optimization |
| Multiple PoPs | High | Complex | Global presence |
Cloud is renting. Owning infra is freedom.
Final Thoughts
Startups that rely on infrastructure eventually hit a moment of truth:
Do you want to keep renting performance, or do you want to own it?
The companies that win are the ones that control their networking destiny:
- Their own hardware
- Their own IPs
- Their own routing
- Their own AS number
- Their own transit relationships
Once you own these, no cloud provider or hosting platform can turn off your business.
This journey is not theoretical.It is how every major infrastructure provider was built.
This is how companies move from cloud dependency to infrastructure sovereignty.
ShiftHosting can help you achieve your infrastructure goals and ambitions. Contact us at sales@shifthosting.com
