Colocation vs Managed Hosting

Recently a friend, who is a photographer, asked me why would someone want to lease a server when they could go out and buy one and own it out right. My first reply was, good point, and second was, at least I now know that he knows what I do for a living. It's becoming a common question and frequent event for a Internet Infrastructure provider to see a migration from co-location to managed hosting. Why? Typically, an organization that co-locates in a datacenter is going out and purchasing hardware that will inevitably become obsolete in a year or so. And typically with a full (42U) cabinet, 20amps of power is not enough and in some cases may require 40 additional amps. With the cost of power increasing, a company can expect to pay between $20-25/amp and $700-850 per installation for a 20amp circuit at 110v. So when you consider that in a Managed Hosting environment that power is included in the monthly price ( so is bandwidth for that matter), and the latest processors, drives, and other components, then Managed Hosting looks like the obvious answer. No so quick! What if you need a high-end video card or need to add another appliance, like a google appliance? In those cases you would require co-location and of course there are other examples but bottom line is you need to look at both options and right now I’m seeing more leaning towards managed hosting than co-location.