Here's Some Alternatives for Colocation in Phoenix:
OneNeck Hosting [Good intermediate hosting] [recommended for business and secure applications]
ATJEU Hosting [recommended for individuals or non-profits]
http://www.atjeu.com 1/4 Rack - 5 IPS $250.00
and local hosting:
Secure Hosting [No contract Hosting for $19.00 a month (not your own VPS)]
Amazon, of course, provides 1 year of EC2 with 2 Virtual Private Servers (using their minimum size appliance image) FREE. Disadvantages include no physical server, so you need to be able to image your own server to convert to a physical image if you ever want to move it. Of course it's fairly trivial to back off your services and move, (just ask the list for help if google doesn't show you how). Amazon provides great tools for effective cloud hosting, including a complete firewall and expandable storage, with all SSH/SFTP access via keys, which are easy to script for and use (and more secure than running SSH in your own colocated server.
So, I would recommend that you use AWS initially, or if you need a PCI Compliant solution, for instance, which is one of the only reasons to get a rack or physical server, go over to ATJEU or OneNeck.
I can give you a ssh account if that's all you need?