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I have a Linux laptop (Vostro V13) running a Celeron M chip. This is a fine laptop, but running unit tests especially for Rails applications is slow. I want a faster development environment but I don't want to spend too much money. So the choice I have is between $390 for a Linux desktop machine with a Pentium Dual Core Processor E5400 and just paying between $30 and $40 a month to Linode and trying to do development remotely on that server.

Can anyone with experience developing server applications using both methods offer any advice?

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If you have a decent Internet connection then go for the remote machine. The costs for maintaining, powering, and cooling the new machine would take up a decent chunk of what you'd pay for the remote server. Plus, gio and kio let you operate on the remote machine pretty much the same as if it were local.

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