Bare-metal servers sound super cheap when you look at the price tag, and yeah, you get a lot of raw power for the money. But once you’re in an enterprise setup, the real cost isn’t the hardware at all, it’s the people needed to keep everything running.

If you go this route, you’ve got to build out your own stack for security, global delivery, databases, storage, orchestration, networking ... the whole deal. That means juggling a bunch of different tools, patching stuff, fixing breakage at 3 a.m., and scaling it all when things grow. Pretty soon you need way more engineers, and the “cheap” servers don’t feel so cheap anymore.

A single, powerful box (or a couple, for redundancy) may still be the right choice, depending on your product / service. Renting is arguably the most approachable option: you're outsourcing the most tedious parts + you can upgrade to a newer generation whenever it becomes operationally viable. You can add bucket storage or CDN without dramatically altering your architecture.

Early Google rejected big iron and built fault tolerance on top of commodity hardware. WhatsApp used to run their global operation employing only 50 engineering staff. Facebook ran on Apache+PHP (they even served index.php as plain text on one occasion). You can build enormous value through simple means.

If you use a cloud, you need a solution for security (ever heard of “shared responsibility”?), global delivery (a big cloud will host you all over, and this requires extra effort on your part, kind of like how having multiple rented or owned servers requires extra effort), storage (okay, I admit that S3 et al are nice and that non-big-cloud solutions are a bit lacking in this department), orchestration (the cloud handles only the lowest level — you still need to orchestrate your stuff on top of it), fixing breakage at 3 a.m. (the cloud can swap you onto a new server, subject to availability; so can a provider like Hetzner. You still need to fail over to that server successfully), patching stuff (other than firmware, the cloud does not help you here).

I used to say "oh yeah just run qemu-kvm" until my girlfriend moved in with me and I realized you do legitimately need some kind of infrastructure for managing your "internal cloud" if anyone involved isn't 100% on the same page and then that starts to be its own thing you really do have to manage.

Suddenly I learned why my employer was willing to spend so much on OpenStack and Active directory.