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I used to lease 4 42U cabinets at a Tier-1 datacenter in Phoenix. Datacenters are cold, loud, lonely places. If you're just looking to host a few small VMs, it doesn't make sense to go through the trouble of racking up a machine. When the machine fails, and it will, absent a remote 'lights out' (IPMI) system, you will either have to pay a 'remote hands' fee or schlep down to the datacenter to figure out why. :(

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One shouldn't even consider colo without IPMI or an equivalent.

And I wouldn't do it unless I had enough redundancy I could let failed machines (or disks) sit unused for a few months, then get them fixed all at once.

A good colo provider can hook your machine to a masterswitch, serial console and put a PXE server on the LAN (or just stick an ubuntu livecd into the drive) so you can solve many problems on your own without relying on IPMI or asking remote hands to help you.

You'll still need a plan to deal with things that you can't do over a virtual console or IPMI and PXE. Replacing failed hard drives, power supplies, DIMMs, etc.

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