> still employs infrastructure engineers

> The "cloud" reducing staff costs

Both can be true at the same time.

Also:

> Otherwise you're waking up at 3am no matter what.

Do you account for frequency and variety of wakeups here?

> Do you account for frequency and variety of wakeups here?

Yes. In my career I've dealt with way more failures due to unnecessary distributed systems (that could have been one big bare-metal box) rather than hardware failures.

You can never eliminate wake-ups, but I find bare-metal systems to have much less moving parts means you eliminate a whole bunch of failure scenarios so you're only left with actual hardware failure (and HW is pretty reliable nowadays).