I've tried colocation, but the server you own becomes out of date faster than it depreciates. Also, I've found the colo providers to be very stingy with bandwidth. AWS can get very pricey, unless you're using them as a PaaS provider. On the other hand, some of the dedicated server offerings are extremely attractive. For example, BurstNet is offering unmetered 1 Gigabit or dedicated/guaranteed 100 Mbit bandwidth for only $179/month, including this high-end dedicated server configuration: Quad Core Xeon x3220 (2.4Ghz) 8GB RAM (2) 500GB SATA w/Hardware RAID 5 IP4s included, plus IP6 Pretty much any Linux distribution, or Windows Server for a little extra per month Check out http://bit.ly/burstsale for this and other options on sale.