Unironically - I agree. You should be outsourcing things that aren't your core competency. I think many people on this forum have a certain pride about doing this manually, but to me it wouldn't make sense in any other context.

Could you imagine accountants arguing that you shouldn't use a service like Paychex or Gusto and just run payroll manually? After all it's cheaper! Just spend a week tracking taxes, benefits and signing checks.

Self-hosting, to me, doesn't make sense unless you are 1.) doing something not offered by the cloud or a pathological use case 2.) or running a hobby project or 3.) you are in maintaince mode on the product. Otherwise your time is better spent on your core product - and if it isn't, you probably aren't busy enough. If the cost of your RDS cluster is so expensive relative to your traffic, you probably aren't charging enough or your business economics really don't make sense.

I've managed large database clusters (MySQL, Cassandra) on bare metal hardware in managed colo in the past. I'm well aware of the performance thats being left on the table and what the cost difference is. For the vast majority of businesses, optimizing for self hosting doesn't make sense, especially if you don't have PMF. For a company like 37signals, sure, product velocity probably is very high, and you have engineering cycles to spare. But if you aren't profitable, self hosting won't make you profitable, and your time is better spent elsewhere.

I'm totally with you on the core vs. context question, but you're missing the nuance here.

Postgres's operations is part of the core of the business. It's not a payroll management service where you should comparison shop once the contract comes up for renewal and haggle on price. Once Postgres is the database for your core systems of record, you are not switching away from it. The closest analog is how difficult it is/was for anybody who built a business on top of an Oracle database, to switch away from Oracle. But Postgres is free ^_^

The question at heart here is whether the host for Postgres is context or core. There are a lot of vendors for Postgres hosting: AWS RDS and CrunchyData and PlanetScale etc. And if you make a conscious choice to outsource this bit of context, you should be signing yearly-ish contracts with support agreements and re-evaluating every year and haggling on price. If your business works on top of a small database with not-intense access needs, and can handle downtime or maintenance windows sometimes, there's a really good argument for treating it that way.

But there's also an argument that your Postgres host is core to your business as well, because if your Postgres host screws up, your customers feel it, and it can affect your bottom line. If your Postgres host didn't react in time to your quick need for scaling, or tuning Postgres settings (that a Postgres host refuses to expose) could make a material impact on either customer experience or financial bottom-line, that is indeed core to your business. That simply isn't a factor when picking a payroll processor.

You can outsource everything, but outsourcing critical parts of the company may also put the existence of the company in the hand of a third-party. Is that an acceptable risk?

Control and risk management cost money, be that by self hosting or contracts. At some point it is cheaper to buy the competence and make it part of the company rather than outsource it.