What factors into choosing a distribution server for transactional replication? In our topology, we've always had the distributor reside on the publishing server. We rarely generate snapshots and performance is good enough, so this is okay for us today. One of our instances is moving to a windows cluster with availability groups, so we need to move the distributor off for resilience/symmetry.
Right now our two choices are to use a server physically close to the publishers, or our single subscription server. Our publisher is in our main office, and our subscriber is in a colocation facility off-site which our ISP runs. We have a pretty good line to it. The reason we're even considering the latter is to save work and licensing costs.