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Why do I need to buy a physical box? Cant they give me a dedicated EC2 Micro instance instead? Solve the ISP issue, and the speed/ connectivity/ power etc?

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It's easier to convince someone that it's securely 'theirs' with hardware than if it seems like just another cloud email service?

But then they spend a lot of time being a hardware company, no?

So? It's a necessity of establishing trust with the customers.

How about a VM that I can host at a location of my choice? On prem, ec2, or a dedi somewhere?

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