* External modems are only a few dollars more than internal.
* Internal modems take up a slot that you might need someday for something else.
* Modems can get so confused that only shutting them off will clear their problem. You don't want to shut off your server when that happens, do you? Some people insist that never happens. It has happened to me..
* If lightning comes down your phone line (it happens) and you have an internal modem, your whole computer is likely to be fried. With an external modem, you'll lose the modem, but probably not anything else. People insist that UPS'es and surge protectors can prevent this. Maybe so, but external modems are already more isolated from the computer so with all else being equal, they are less likely to pass current to the expensive stuff.
* You can see what's going on with an external modem. You can see when the modem is receiving, transmitting, handshaking- much easier to diagnose problems. You'll tell me you see that on your computer screen, too, but you don't: you see a simulation. You can see the lights on an external modem even when it isn't connected to the computer at all.
* You can share an external modem between multiple computers either manually or by an A/B box- again this facilitates testing and is sometimes very convenient. I don't mean to share the internet - that's network sharing. I mean swapping the modem to a different machine for whatever reason.
* When you upgrade your computer, swapping the modem is much easier. No shutdown, no opening cases.
* When a modem goes dead, you can swap it without shutting down, probably without any tools, too. Business don't like servers shut off for dumb reasons, and replacing a modem is surely dumb.
* When you finally get your cable modem, DSL line or T1 :-), you might actually be able to sell that external modem, but used internal cards are near worthless. Not that an external modem is worth all that much nowadays, but if you put out one of each (external and internal) at a yard sale, I think we pretty much know which one will be in the dumpster the next day.
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