Still having your own hardware seems so much cheaper. Maybe even just for dev/uat environments?

Every big corporate I have worked at has lower cost of capital than Amazon, and yet they want to move to AWS. I just dont understand it.

I think lower cost of capital is a narrow metric and rarely reflects the real total cost of ownership once you account for ops headcount, provisioning lag, redundancy requirements, patching, and developer time.

Cloud looks expensive on sticker price, but it buys instant provisioning, autoscaling, managed databases and multi-region DR, and those benefits only pay off if you actually exploit autoscaling, reserved or savings plans, spot fleets and cost tooling like Kubecost or AWS Compute Optimizer to enforce right-sizing and kill zombie instances.

If you want cheap dev and UAT keep them on on-prem metal or cheap colo, but automate with Terraform and run reproducible runtimes like k3s or devcontainers so environments stay consistent and you do not trade lower capex for a creeping operations nightmare.

I think it can make sense for user-facing services. I host my web and database servers with AWS because unmanaged DBs can be a PITA, Amazon is peered with basically everyone, AWS is way more generous with network speeds than many dedicated / colo providers, and it’s easy to scale capacity up and down. Backend servers are hosted with cheaper providers though.

The main thrust of the economic argument has been on the cost of system adminstrators that maintain the hardware. Electricity and cooling being big ongoing costs, but also when AWS released it wasn't uncommon to order a server and have it take 3 months to arrive.

I think in practice the system administrators are still in the company now as AWS engineers, they still keep all that platform stuff running and your paying AWS for their engineers too as well as electricity. It has the advantage of being very quick to spin up another box, but also machines these days can come with 288 cores, its not a big stretch to maintain sufficient surplass and the tools to allow teams to self service.

Things are in a different place to when AWS first released, AWS ought to be charging a lot less for the compute, memory and storage, their business is wildly profitable at current rates because per core machines got cheaper.

I've moved two clients to colo. Dramatic cost savings. So many systems only use VMs and a few basic cloud features. Everyone knows this, but just to make the point, you can still use certain cloud products (cloud storage for example) just fine while running your primary workloads on your own hardware. Sometimes it makes perfect sense, and you just need someone to nudge you and tell you it's going to be ok.

Going to the cloud can't possibly be as cheap as owning your own hardware for obvious reasons - they have to make money somehow. Well, unless you use spot instances, which uses spare nodes. In any case, you move to the cloud despite the cost if you need the multi-region redundancy, the management/features etc. More commonly it's because the higher ups heard everybody's doing it, but oh well :D

There are so many articles like these:

"We Moved from AWS to Hetzner. Cut Costs 89%. Here’s the Catch."

https://medium.com/lets-code-future/we-moved-from-aws-to-het...

> I just don’t understand it

Maintaining and updating your own hardware comes with so much operational overhead compared to magically spinning up and down resources as needed. I don’t think this really needs to be said.

You need to factor in the data center, power, cooling, hands-on support, future growth, etc.

You're never just paying for the hardware.