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For certain kind of workloads renting bare metal is waay cheaper than VMs. What the small time bare metal providers cant compete with is all the different services sold along with the VMs. If it was just price per VM I suspect bare metal renting would be a lot more cost efficient in a lot of scenarios.

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The other area they can't complete is on variable or disaster recovery scenarios, the sort where you'll reserve CPU instances, but only spin them up for your heavy load parts of the day or when you have an unexpected migration. And when you're not using them, AWS puts them on their spot market.

They're probably a bad match for when you have a single batch of work to do, like when the New York Times converted their archives, or every time Netflix has to reencode their video library.

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