Cloud computing and self managed server hosting

At some point, I needed to make a decision about the next iteration of web hosting I was going to provide for my business. I was currently in a colocation plan and while generally happy with the results, I knew that we were going to need to begin replacing our equipment in the very near future.

While having lunch with a colleague, I asked what his company's IT department was doing about similar situations. He indicated that they had decided not to purchase new equipment. I was shocked! I didn't understand what they were going to do and asked him if they had decided to convert their online operations over completely to a cloud computing arrangement.

He indicated that they were in fact considering offloading a percentage of hosting needs to the cloud, but had decided to invest in self managed server hosting packages for the rest.

His IT staff had crunched the numbers and decided over the next 2.5 years, they would actually save a huge chunk of money by simply paying to lease equipment instead of buying it outright and placing it in a data center somewhere.

Armed with this knowledge I went back to my IT staff, and after some discussion, we decided upon a similar plan of action.