You are massively overcomplicating this.

> I don't worry about booting them. I don't worry about provisioning operating systems or configuration to them. Or security updates. They come up with a lot of pre-provisioned monitoring and other stuff. No effort required on my side.

These are not difficult problems. You can use the same/similar cloud install images.

A 10 year old nerd can install Linux on a computer; if you're a professional developer I'm sure you can read the documentation and automate that.

> And for production setups. You need people on stand by to fix the server in case of hardware issues; also outside office hours.

You could use the same person who is on standby to fix the cloud system if that has some failure.

> Also, where does the hardware live?

In rented rackspace nearby, and/or in other locations if you need more redundancy.

> What's your process when it fails? Who drives to wherever the thing is and fixes it? What do you pay them to be available for that? What's the lead time for spare components? Do you actually keep those in supply? Where?

It will probably report the hardware failure to Dell/HP/etc automatically and open a case. Email or phone to confirm, the part will be sent overnight, and you can either install it yourself (very, very easy for things like failed disks) or ask a technician to do it (I only did this once with a CPU failure on a brand new server). Dell/HP/etc will provide the technician, or your rented datacentre space will have one for simpler tasks like disks.

Shush! The cloud companies want customers to think it is a complicated near death experience to run on their own hardware.

It is sad that the knowledge of how easy it really is, is getting extinct. The cloud and SaaS companies benefit greatly.