[cullenking]

My wording wasn't too clear, sorry. I didn't mean I have spent that money, just that my planned hardware buildout will cost somewhere around $10k to start. Our single server was about $2k to put together 1.5 years ago. We use it for everything - mysql, redis, pool of unicorns, nginx proxying to unicorn pool and a handful of background workers (resque). I have already dealt with drive failures, but I loaded up the 8 hotswappable bays with drives, so it wasn't too scary. However, I am scared for other hardware failure, which is why I want some more machines.

I am not using Xen. I can see the benefit for some stuff, but I don't believe it's beneficial for my use case. However, I will make that decision in a more informed manner when I am actually in a position to expand our hardware (money and need).

I don't think the colocation costs more. Seriously, I have had great use out of my current server. I figure with a colocated set of 4 servers, $10k initial expenditure + $300 a month for 2 years is $17200, or I can go with rackspace and pay $3000 a month for 2 years, and be $72,000 in the hole. Oh, and after that two years, I don't even have spare hardware to play with!