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Fraction of the cost long-term. Not short term, where they found themselves.

Renting dedicated servers with lots of disk has typically been vastly cheaper than S3 "forever" on a monthly contract basis, so there are plenty of options before going the route of bare metal in your own rack.

But even renting space by the 1U and leasing servers directly adds surprisingly little overhead.

I'm not sure where you get that data, but it doesn't match anything I've found in the 27 dates centers we do business in. Storage, versioning, redundancy, durability and geographic availability. That is the core of S3, not just storage.

The data centres makes little difference in this case. You can fit far more storage than what Everpix used comfortably in a half rack (e.g for density I can buy 5U servers storage servers with up to 48 x 4TB drives). In London, that runs me at most about $1k/month per site. Three sites for $3K/month. 400TB worth of off the shelf storage servers would run us ~$1600/month without even shopping around, in leasing cost per location, for ~$8000/month for triple redundancy on top of raid. Then there's bandwidth.

400TB even at the Reduced Redundancy Storage pricing is ~$20k/month up until the price drop. With the price drop it looks like it'll be more like $9300 with RRS, which is actually getting cheap enough that it's worth it in some cases, to avoid having anyone spend their time on managing anything. The gap will increase again once you factor in request pricing and bandwidth, though, as even my standard price list prices for bandwidth would add up to less than the cheapest published bandwidth tier at Amazon with just a tiny little bit of hassle (BGP setup to multihome each sites with 2-3 different transit providers with different coverage - lowers cost by letting you pick a transit deal that does not give full access to the internet at very low cost coupled with a full price full coverage one)

Or I could spend about $12k/month at Hetzner for the same storage + an aggregate stated "guaranteed" bandwidth of about 2Gbps per location at no extra cost. Again, without shopping around. The moment you do more than about 20-30TB transfer/month, Hetzner becomes cheaper than S3 with that setup, and probably at about 50TB+/month it'd take effort to beat them when buying my own transit too.

You're leaving out the part about the software and operational support to handle failover, data integrity checks and correction, etc. You're not just tossing disks in a rack but managing a highly-available, highly-durable storage system on top of them.

You can definitely beat those rates at large enough scale but for a startup you're talking about dedicating a non-trivial chunk of your skilled technical staff's time in the hope of breaking even. That's an obvious move for Backblaze or Crashplan but for other companies it might be a dubious investment versus nailing the core product.

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