renting small servers...much more sense even for small companies

No. At one time over 10 years ago, I had a dedicated server with one of the hosting companies. They charged me $225/month.

I moved to AWS and my cost dropped to ~$30/month. Even now, 10 years later, my total AWS bill for primarily EC2 and RDS services that runs an application that pays my bills is ~$75 per month.

If my company suddenly went viral and had a bunch of new customers, I could scale up instantly.