The thing is, his TCO would include training, rebuilding their existing processes and procedures, and having to run stuff in parallel for a while. That's not including a re-architecture and the impact it would have on their stuff today.

Sometimes all people need is a big box in a data center. Management of the environment is already a sunk cost. The hardware is already expensed. They don't care about scalability/DR/etc.

From a hard dollar point of view staying colo makes sense. Plus politically they don't want to do it, which is really the only point of view that mattered.

If they needed to have actual DR then the numbers would be different.