Yes, cost per compute measurable (memory, CPU, etc) is higher in the cloud. But what's never mentioned when people complain about the cloud being expensive:
a) ISP and CoLo costs
b) Redundancy/Multiple AZs
d) Failure recovery/cutover
f) Monitoring/Health statistics
g) The other goodies that come along with being in the cloud(Lambda, CloudFront, Route53, SQS, etc)
I feel like we're at a point where people should have to justify why they are running their own data centers vs. having to justify why they're running in the cloud. There's obviously many very good reasons to do either, or both, but if you don't already have a data center, you better have some damn good reasons for starting one up.
A) Colo is $50-150/U with blended top tier bandwidth, 99th% billing and usually includes remote hands time.
B) Even with 100% redundancy you're still ahead by $3000/month. Please understand Amazon offers absolutely no redundancy built in and nodes go down regularly. It is up to you as a developer to build redundancy around the tools they offer.
C) Amazon doesn't take backups for you. You have to pay for this either way.
D) Again Amazon doesn't handle this for you. You have to pay either way. Buying an exact replica of the hardware I've mentioned and cololocating it elsewhere still puts you ahead by $3000/month.
E) What support do you need? Dell offers same day or even 4 hour parts replacement with the appropriate warranty service. Most Colos offer remote hands for free up to a certain hourly.
F) Lots of ways to handle this. You can use IPMI, built in OS tools, etc. There isn't much exclusive to AWS you can't easily replicate elsewhere.
G) I never said not to use Amazon for anything. In fact you should be building your applications for scaleability INTO the cloud. This is part of the idea behind the whole microservices movement.
> Except then you're stuck with a $15K server, and you had to spend all 15K up front
Also, tying yourself exclusively to AWS services is not a good long term strategy because then you have vendor lock-in that's worse than being stuck with some old hardware.
If you don't need the scaling abilities of cloud, then it just doesn't justify the added expense because no matter what you say, you still need people to manage systems.