Every week I get bombarded with emails and advertisements for server hardware and software solutions. Obviously there are a lot of people out there who like to bring things in house, but I am here to tell you today that owning your own hardware is like buying your own cow to get your daily milk. Or do you remember in that cartoon the Incredibles that the seamstress says "not capes" and the hero says "but..." and the seamstress gives the examples. Let me give you a few.
A year ago I walked into a situation at a company that had recently been sold in which the data of 20,000 customers was sitting on two servers up in a data center. If those servers were to fail and the data were lost, the company would probably cease to exist. Most of the former IT employees no longer worked at the company as a result of the uncertainty that existed before the sale of the company, so there weren't many resources around to address the issue of how to manage the servers.
I started asking question such as "Where is the data backed up?" and "What is the recovery plan if something goes down on the servers?". It turned out that the configuration of a new server to support the customers was not a copy/paste recovery process. It was days of configuration to get things back up to running again on a new box if a processor or motherboard died (and the servers were already many years old and running 24 hours a day under tremendous loads).
As you look at this problem, it could happen anywhere. All you have to do is put a box in a data center and your problems begin. What do you do? Do you buy redundant hardware at $3-5000 per server? That is a lot of money to just have sitting around turned off! Do you use tape drives and arrays of disks? Who are you supposed to call to put humpty together again if the guy who installed the proprietary tape drive system is no longer around and you have a component failure in the server and need to get the data out? What if you have everything on your array of disks but you can't get the sucker installed in the latest box because the first time you installed it was a couple operating systems ago? What if one disk fails in your array and you they haven't made that drive for 4 years and you can't buy one? What if the ram fails and it takes you 48 hours to ship in the proprietary type that works with your big-name server?
Another company I know of loses an incredible amount of money each year because their programmers are busy fiddling with the firewalls and network that protects a couple really boring/low traffic servers. The wasted payroll of this effort is in the tens of thousands of dollars each year, and the lost opportunity cost that occurs as projects don't get completed and customers go to other vendors reaches into the millions.
At the end of the day, it is very expensive to own hardware and hire the resources to mantain those servers, especially considering that the maintenance should only happen once a year when something fails.
I think it is important to qualify this perspective. Some companies are like grocery stores in that they are huge and need a lot of "milk" or servers in this case, and it makes sense that they have people and extra hardware to handle these things. Interestingly, however, most businesses are nowhere near this big, but far too many of them pay big money and put themselves in bad situations when disasters happen, and it doesn't need to be that way.
In our case, for about $200 a month, we can pay for a leased server that is top of the line in a data center that is top notch. By going with one of the big boys, we are guaranteed hardware replacement when anything goes down, and guaranteed there are lots of spare parts for our server for years to come. The cost savings and reliability of such a solution or amazing. We have to watch our backups and know how to get back up again if there were any problems, but for the most part we are freed up to do what is most important, and that is make the company lots of money.
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