Good question… what is proper? The answer is – your budget will determined what is proper. My proposals will be suitable for Web Servers with PHP projects, using MySQL as a database and Nginx as a web server.
I do not speak here about hired dedicated servers or hostings. Only collocation with proper server or even your company/home server room with serious ISP channel will be reviewed here.
If you will go to collocation, in most cases you will be limited by corporate style rack servers, though there are might be some options how to avoid huge expenses.
If will build company/home server room, than the great number of possibilities how to save the money and make service reliable will become available for you.
The biggest pros of colocation are:
3) Power supply protection
4) Various backup ISPs
5) You can choose from great number of data centers around the world.
1) For heavy load project (starting from 6 servers at least 1U each) it will be deadly expensive.
2) Tricky price plans to make you to pay as much as possible
3) You are not always close to you server, and it is not always easy to access to it
4) no guarantee that power and Internet will not go down by the fault (breakdown) of the data center
5) Sometimes it’s hard to leave the data center with you equipment
6) If you will choose a small data server reseller you may loose your equipment in case of his bankruptcy (very common situation).
The pros of having your own company/home server room
1) It it close to you, you react immediately, or delegate it to arranged person you relay on.
2) You make up your redundancy (electricity and Internet) with your own hands. So you will now your weak places.
3) You can save money and decide what is real important for redundancy and what is not.
4) If you do everything right, the only week point will be your ISP
1) Well, depends on the property, it useless to build something while you are renting it.
2) There might be no fiber ISP provider around
3) Additional resources (special BGP router or separate server) to keep static IP while switching between ISP. Minimum number of IP purchase from RIP authorities in 256.
The ideal situation in my mind is when you are living near the large city (more than million inhabitants) in your own house with ability to have several fiber ISP. 2 will be quite enough for redundancy. 1 will be paid for heavy general traffic, while another stay prepaid (minimal tariff) in case the main one is down.
So all this stuff is not just for “play around” or education, but enough for startup with heavy load.
Also from my personal experience if you decided to go for colocation, the best place for this is UK. US and EU datacenters are less flexible, but again this is my personal attitude.