I wrote a thing about the pros and cons of doing that, but instead I thought it would be better to give you some objective numbers.
1 full rack with 15a of 120v power (remember, don't exceed 75% of a circuts rated potential, so that's really 11.25a) at he.net in freemont is going to set you back $400/month. $500/month with 100Mbps bandwidth. (more than you will need for now)
Now, you are talking between 5-7 low-power servers there.
You want to buy a metered/switched PDU ($400 or so new, $150 used)
one of my 8 core, 32GiB ram opterons with 4 disks is about $2500 in parts, new. I can't imagine anyone charging more than $500 to put the thing together.
Note, unless you have really cheap hardware guys and downtime costs you little, I'd avoid used hardware. I started on used servers, and I no longer buy used hardware that is user-serviceable. (I avoid used servers. But I may buy used switches.)
If you need racker/stackers I can point you at experienced guys who will be happy to work for $50-$60/hr, and people who can get the job done at half that. If you want more advanced hardware troubleshooting, double that for someone really good. but for that kind of money they should be able to set you up with an automated provisioning system. for comparison, I'll work for $100/hr if you are willing to deal with my inconsistent schedule.
Setting up a server should not take more than a few hours, including hooking up the serial console, etc... And hardware problems? figure on once every two years per server.
a lot depends on the quality of your provisioning setup (something like cobbler is good) and your serial console/rebooter setup. But it /can/ be a lot cheaper than 'the cloud' in many instances.
Right, so, if they were quoted $3K a month, in a couple of months of self hosting, they'd have definitely recovered their investment, and then start saving a few K a month.
Your point about onsite hands is something I forgot. In the companies I've had, I've always had offices adjoining the datacenter. (I've been lucky to end up with such great spaces.)
If you don't have onsite hands, then fixing even minor hardware issues can be a major pain. If you do, then cheap users servers are fine, if your software is fault tolerant. If a machine goes down, others takeover in a minute and you have slightly less capacity. No big deal.
I just see these crazy high numbers for hosting, especially "cloud" stuff and don't get it. Cloud in particular seems to only make sense if you're actually elastic, or scaling up very fast. Amazon and so on's pricing, for "always on" servers, does not look that appealing.
Personally, I think the very best use case for "cloud" is backup servers. Think of it, run a 'small' instance to slave your database and other stuff to EBS storage, and once a month practice bringing up production on "the cloud" - cheapest and most complete backup system I can think of.
As for onsite hands, 95% of what you would go to the co-lo for can be done from your comfy chair if you have a good serial console/rebooter setup. Also, the he.net price includes "remote hands" service. Note, don't expect more than "remote hands" and make sure you clearly label everything... but you can usually avoid leaving the office.
1 full rack with 15a of 120v power (remember, don't exceed 75% of a circuts rated potential, so that's really 11.25a) at he.net in freemont is going to set you back $400/month. $500/month with 100Mbps bandwidth. (more than you will need for now)
Now, you are talking between 5-7 low-power servers there.
You want to buy a metered/switched PDU ($400 or so new, $150 used)
one of my 8 core, 32GiB ram opterons with 4 disks is about $2500 in parts, new. I can't imagine anyone charging more than $500 to put the thing together.
Note, unless you have really cheap hardware guys and downtime costs you little, I'd avoid used hardware. I started on used servers, and I no longer buy used hardware that is user-serviceable. (I avoid used servers. But I may buy used switches.)
If you need racker/stackers I can point you at experienced guys who will be happy to work for $50-$60/hr, and people who can get the job done at half that. If you want more advanced hardware troubleshooting, double that for someone really good. but for that kind of money they should be able to set you up with an automated provisioning system. for comparison, I'll work for $100/hr if you are willing to deal with my inconsistent schedule.
Setting up a server should not take more than a few hours, including hooking up the serial console, etc... And hardware problems? figure on once every two years per server.
a lot depends on the quality of your provisioning setup (something like cobbler is good) and your serial console/rebooter setup. But it /can/ be a lot cheaper than 'the cloud' in many instances.
edit: added the bit about used hardware.