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> I can understand that virtualization is useful when your resource requirement is less than one machine but above that, I doubt there are any real benefits. It's snake oil.

Tell that to Netflix - or any of AWS' customers, really.

AWS is a prime example. EC2 unreliable, doesn't perform well and is expensive (and fairly weather dependent by the looks too). If you want anything that can actually shift anything, dedicated servers are cheaper (but you might actually have to commit - oh dear if your margin is that tight, you don't have a product worth it).

The only use case I can see for it really is rapid scaling but that seems only viable for content delivery as your data back end architecture is way harder to scale than click the magic cloud button. Back in the old days we used to do content via CDN (Akamai etc) which actually works out cheaper per GiB.

Then we approach things like S3 which is terribly unreliable (some of our clients use it for storage as it's cheaper than a SAN but they suffer for that). Drop outs, unreliable network requests, latency, rubbish throughput and buggy as fuck SDK.

Its like consuming value line products from a supermarket. Sure there's quantity but its lacking in quality.

If you setup you're stack wrong then some of you're points are valid. But many amazon services offer you redundant infrastructure at a reasonable cost.

But the key advantage over traditional hosted solution is that you can run reproducible test and dev stacks for 8/12 hours a day without having to pay for hardware that sits there doing nothing while you sleep. Sure cloud computing has it's faults but the ability to run you a HA test stack in 3/4 datacenters in minutes, and pay for just the time you are testing it, enables people to move forward and develop more and more impressive technology.

OTOH I'm not sure why you would run cloud on your own hardware as you're already paying for the HW, I suppose it simplifies the management significantly for PayPal or they wouldn't be doing it

Take a deep breath, relax, and realise that plenty of people have use cases that are different to yours.

If you have a way to build a disk image containing your application from scratch virtualization buys you easily rebuilt application stacks, and extremely clean systems. That is also a very good first step to gain the ability to scale out and up (ie. run your app in 20 places around the world).

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