But my point is that companies' IT departments did not maintain infrastructure just like Amazon did.
In ~2005 when companies were first experimenting with AWS cloud, they might start with dev & test servers. They click a few buttons and are amazed when new servers get spun up in minutes and their programmers are productive immediately. The natural question that company execs ask is, "why can't our own internal IT department spin up servers for us in 10 minutes?!? Why does it take them so damn long?!?"
They wouldn't have asked those hard questions if their internal IT capability was equivalent to AWS. Eventually, their improved experiences with AWS on Dev&Test&QA convinced them to migrate mission-critical Production workloads to AWS as well.
>We have cheaper hardware. We have (supposedly) better software.
You're still focusing on on hardware+software and not considering the IT employees' speed of execution in how company executives compare the situation.
Even Netflix as a tech company maintained their own datacenters for over 10 years but ended up migrating to AWS. Their "Guardian" moment was a big database corruption in 2008. They also had ambitious plans to expand into countries outside of USA. Those were some of the factors that convinced them they didn't want to invest anymore in their own datacenters and preferred AWS take care of it. Amazon employees iterated on datacenter capabilities faster than Netflix engineers could do it.