It is no doubt cheaper to pay someone to colocate your own hardware, but in my experience running production services on my own colo'd hardware: it is far cheap

It is no doubt cheaper to pay someone to colocate your own hardware, but in my experience running production services on my own colo'd hardware: it is far cheaper and easier to just use a cloud provider in the long run. I ran a widely used teleconferencing system for years that served a ton of traffic, and the amount of time it took me to manage my boxes, handle issues, and deal with one off setup processes was far more costly than the amount of money I started paying Heroku every month a few years later. I know Jeff isn't factoring in the other hidden costs here: but be wary. Unless you are a truly massive operation I don't see how you can possibly do this and save money vs going the easy route and using your favorite PaaS. Just my two cents.