At the company I work for, we lease space in datacenteres in a few spots around the country. [1]
The thing is, we do this because we have specific hardware requirements which require that we use our own hardware, and ensure we can't use anyone else's stuff very easily. The problem is, we pay through the NOSE for it.
IMO, the optimal choice for most startups right now is to have very few servers (if any) that their run in-house, and to host the rest with other people.
There's a couple of reasons for this- The first is reliaiblity. Hosting companies have trained staff watching over the servers, and monitoring for a failure. While you might do a lot to watch for failures [2], you'd save sleep and sanity if you only needed to monitor for logic failures, and had someone else (the hosting co) helping watch for hardware problems.
The second major reason is Bandwidth! Getting quality, symetric bandwidth run to your door costs a LOT of money.. SpeakEasy DSL can get you started [3], you'll struggle to get anything higher that a 6.0/1Mbit line- For hosting, you need LOTS of upload- That 1Mbit will get taxed out quickly.
Take a look at Bandwidth offerings by Colos- Often you get Royally screwed, when compared to renting a dedicated server from them. Companies like ServerMatrix will give you 1.5 TB of monthly bandwidth for under $100.... That'd cost hunderds for the bandwidth alone in most colos.
The dedicated server places tend to assume you won't fully use the line, so they oversell- That's how you can get th e great deals on bandwidth.. The nice part is that if you go with a at least semi-reputable place (servermatrix, rackspace, etc) they have MORE than enough to cover you, even if they'll a littel annoyed that you use it all ;)
Read your TOS carefully.
Amazon's EC2 program is amoung the best for hosting, if you can get into it. It allows you to dynamically scale up the number of servers, and has very decent prices. This is among the best options for a startup because you can load balance to handle spikes in traffic, such as Digg, Techcrunch or Slashdot.
One other point I'll briefly touch on is depreciation of assets- If you buy your own servers, and add them to a colo, when they get old, you lose a lot of the initial value. You're often not going to want to keep the old servers in the farm, once they're so low they'll do more harm than good. With renting servers, along with the additional bandwidth and uptime, you get the advantage of being able to just say "I'm done with these servers.", and lose nothing.
-Colin
[1] I can't actually tell you the places for confidentiality reasons, but it's not important for this discussion anyway.
[2] Nagios Alerts to the Cellphone are a good start..
[3] Chosen because of good TOS, and reputation, but with the Bestbuy deal, be on your guard here. The situation could change quickly.
I started out with my boxes in my dorm room, under my bed :) Kept the bed warm, and I appreciated the "white noise," but reliability left something to be desired.
Any other stories? Does anyone know of a cheap colo in Boston/SanFran that will rent you 1U at a time?
All else has been nigh on perfect. They do expect that you'll handle everything yourself that can be handled remotely, though I wouldn't think that was a problem in this crowd. :)
Edit: Er, and if you do choose to go with them, email me for a discount code if you want one.
Oh, and I forgot to mention, Steve from Reddit.com was saying they've had a good experience with Server City, which will rent out fractions of a cabinet. I think they're based in Cambridge.
we are looking for a good deal too in the midwest, we are located in Milwaukee, WI and it seems like chicago is cheaper than Milwaukee area colocation services.
For now we are making use of a speakeasy 6/768 dsl line for our beta servers.
If barcampUSA panned out, we were going to offer our service to the public earlier and we were looking at getting a dedicated colo for 1-2 servers, but for now, our dsl is fine.
Go to http://www.webhostingtalk.com/ and spend a couple hours there reading. You'll find some sharp folks on our end of things, and also some vendors who hang out and build their brand. Very helpful.
Took a lot of customers with me when I left. I couldn't afford to support them on CI Host anymore. Too many problems. They pulled the power on our servers without warning and pulled out the power backup to upgrade it (without warning, mind you), then realized they didn't have a spare unit and left the whole rack unplugged. Had to drive out there and fix it myself.
Moved my stuff to The Planet, but have had problems with them after the merger with EV1. The support panel has slightly reduced functionality and some broken pages. Their support team takes up to thirty minutes to respond to issues. Just sad. It used to be great.
Colo4Dallas has pretty much non-responsive support teams. My employer is moving our remaining servers out of there. Took them forty-five minutes to get around to a down production box. That wasn't even to fix it, just to check it.
Have GREAT luck with Rackspace at work, but definitely more expensive. Very responsive. Preemptive maintenance. Prompt notifications of hardware issues, often before we notice them. IMMEDIATE support.
After they resolved some network instability issues, Sagonet was really good for an old venture of mine. Good prices too.
Geez.....I feel like an unfaithful lover after listing off all these hosts I have used. Probably even a couple more I can't remember.
MT will definitely be one of my first choices when they get all that sorted out, though.