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We use linode for quite a lot of offsite stuff and they've generally gotten worse over the years. Their support used to be a lot more helpful and personal. I haven't used DO so I can't say anything about them.

Owning hardware is usually more cost effective in bulk, however when you're renting you can easily upgrade to the latest and greatest hardware every year or so without any loss of investment. There's definitely a lot more work involved in colocation.

We've used phone.com with Cisco hard phones. It worked out pretty well and was one less thing for us to manage.