That's a fair list. I'd argue that you can get scale-up by augmenting your colo servers with on-demand VPS servers and still save money on the common case (we d

That's a fair list. I'd argue that you can get scale-up by augmenting your colo servers with on-demand VPS servers and still save money on the common case (we did this not too long ago when we got an unusual traffic spike). If the traffic is consistent, just add another colo sever. The "replace hardware on vacation" argument is the most compelling so far. Better hardware and better physical security I don't necessarily buy; security is the same at a colo, and good hardware is pretty cheap these days.