> AWS is not always so cost-effective when you truly dig in and crunch the numbers.
If you have a consistent level of traffic (i.e. you don't have inordinately wild upswings/downswings like e.g. Reddit), AWS isn't even remotely cost-effective. I was going to do the math to compare our current physical server infrastructure with AWS, and even if you factor in that physical servers need to be in pairs (for redundancy) and over-provisioned (for traffic spikes), I didn't even get as far as back-of-the-envelope math before it was obvious that AWS was completely infeasible.
There's one clear cut use case where AWS/Azure are incredibly cheap - Disaster Recovery. At my last job, we maintained a small DB instance and nothing else but an empty VPC. Within 15 minutes, we could spin up the entire DR stack including resizing the DB to support Production. There's no equivalent for this when you ONLY run your own hardware - you're stuck with a second site that sits there idle (unless you intend to do Active-Active which has its own share of problems).
Running your own hardware is always going to be cheaper - but you also need to employ folks with hardware management skills. That's fine if you already have those.
Similarly, cloud offerings give you remote reach easily - one company I work at has it's production servers almost literally on the direct opposite point of the globe. You can do datacentres with remote hands, sure, but it's another layer of complexity. Hardware also has a mild barrier to entry in the form of cost - for small shops, doling out the five or six figures you need for initial hardware is a pretty sizable chunk.
If you have a consistent level of traffic (i.e. you don't have inordinately wild upswings/downswings like e.g. Reddit), AWS isn't even remotely cost-effective. I was going to do the math to compare our current physical server infrastructure with AWS, and even if you factor in that physical servers need to be in pairs (for redundancy) and over-provisioned (for traffic spikes), I didn't even get as far as back-of-the-envelope math before it was obvious that AWS was completely infeasible.