I never actually wrote that up formally…
Overall, colocation is only worth it if you have a pretty big, heavy, active Discourse instance – I’ve seen it be worth it for sites with very large 10GB + databases of posts dating back to 2003, for example.
If your site is small or only moderately active, $20/month (or less) is going to be a better deal, because that’s only $240/year. You can’t get much hardware for $240, even $480.
If you can find a place to cheaply colocate a ~$700 mini-pc – think the Mac Mini colocation services, but extended to cheaper hardware – I do think it’s worth it, bearing in mind the caveat above, this is only proper for fairly large, active Discourse sites. I would not bother colocating very low end hardware, when you can get a very fast Kaby Lake box with nice SSD for $700. Once the hardware is there, it will sit for years, so cheaping out in the beginning is like … cursing yourself. It’s not a good idea.
The other advantage is that the performance / storage speed of these mini-pcs is really quite high relative to the average $20/month cloud instance. But again that won’t matter a lot unless your instance is large or busy, or both!
Some ideas:
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Colocate two boxes, so if one fails, you can just switch to the other one. Kind of a warm spare sort of thing. Upload the latest backup (obviously stored off-site on S3 or what have you) and you only lose 1 day of activity. But you’d be up and running within an hour, probably?
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Colocate with a company that rents out their own stable of hardware servers, then if you have a fail, you’re only paying for them to switch out the box from their stable of existing hardware. Maximum downtime, probably a few hours. Cost per month will be higher though, but hey, no $700 (or $1500) up front investment! Trade-offs, they abound!
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Buy two boxes, have the colocation center keep one on-hand. This way you can avoid any monthly costs as the other box won’t be connected to the Internet, just sitting nearby ready to spring into action when powered on; give the colocation center a call, swap the cables, power up and you’re back and running. Maximum downtime, a few hours, maybe?
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Buy two boxes, keep one at home primed, updated, and ready to ship. Maybe the datacenter won’t allow you to keep a spare on site? This way if one fails you can deliver the pre-built replacement to the datacenter fast, maybe fedex overnight. Maximum downtime, two-ish days?
I do feel that modern hardware is pretty darn reliable, provided you go with a quality SSD vendor – I heartily recommend Samsung based on our experience using them. But, as they say, happens. In general, you need to decide how OK you are with outage / downtime lengths. That’s what you are betting against here. For some sites, two days, or two hours, of downtime might not be a big deal.
You’d need to research and decide what your budget is vs. your risk tolerance… and your willingness to be a sysadmin on your own site.