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When I worked IT for a school district at the beginning of my career (2006-2007), I was blown away that every school had a MASSIVE server room (my office at each school - the MDF). 3-5 racks filled (depending on school size and connection speed to the central DC - data closet) 50-75% was networking equipment (5 PCs per class hardwired), 10% was the Novell Netware server(s) and storage, the other 15% was application storage for app distributions on login.
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Personally I haven't seen a scenario where it makes sense beyond a small experimental lab where you value the ability to tinker physically with the hardware regularly.

Offices are usually very expensive real estate in city centers and with very limited cooling capabilities.

Then again the US is a different place, they don't have cities like in Europe (bar NYC).

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If you are a bank or a bookmaker or similar you may well want to have total control of physical access to the machines. I know one bookmaker I worked with had their own mini-datacenter, mainly because of physical security.
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I am pretty forward-thinking but even when I started writing my first web server 30+ years ago I didn’t foresee the day when the phrase “my bookie’s datacenter” might cross my lips.
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Most trading venues are in Equinix data centers.
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If you have less than a rack of hardware, if you have physical security requirements, and/or your hardware is used in the office more than from the internet, it can make sense.
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5 was a great option for ml work last year since colo rented didn't come with a 10kW cable. With ram, sd and GPU prices the way they are now I have no idea what you'd need to do.

Thank goodness we did all the capex before the OpenAI ram deal and expensive nvidia gpus were the worst we had to deal with.

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