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This anlaysis assumes the rational for co-location would be due to space limitations for additional servers here at the UC Davis campus. This does not address the issue of disaster recovery/high availability because that requires more architectural changes that than simply running servers remotely.
Issues to consider
Cost
Study conducted The UC Davis San Diego Supercomputer Center (SDSC) Colocation Feasibility Study Report found that when amortized over 10 15 years the cost of co-locating at San Diego vs. building additional space on campus were nearly identical.
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