The way I look at this is you still need 3 people minimum on call to have around the clock ops for this rack. Three IT salaries is more than $10k a month. Eventually you'll find the balancing point but its higher than you think.
And you still need someone available for a cloud hosted system - Over ~25 years of handling this kind of work, hardware failures have made up a vanishingly small proportion of the outages I've had to deal with, be it a colo'd setup or a cloud provider
Q: Don't you still need at least 3 people on call for around the clock ops, regardless of how and where your servers or instances live?
Yes, this is a good future: who would ever want to touch the computers they operate? Better to rent computers and position the core competency of your business with a third party, right? Because you can shed some of those pesky janitorial salaries? I’ll be waiting by my phone when you’re on the verge of bankruptcy once the clouds have their teeth in your books, and suddenly I get promoted from “janitor” to “computer operator who has my interests in mind, even though I not-so-subtly malign his existence”.
All you’ve done with this mindset is drive the same janitors to work for the clouds instead and contributed to the downfall of computing as a discipline that any player has any semblance of agency within, as the people who have actually touched datacenter equipment all work for them now or sit around in horror watching as a generation sympathetic to FLOSS arguments willingly hands over the reins of owning a computer to massive corporations.
It's not that cloud is not the right answer. But people have started to forget that running your own metal is still an option. Or with current prices and performance: even a more viable option as it was in the past, because you can do so much more with so much less.
[1]: cranking out useless features nobody ask for while looking down on those (dev)ops people.
Quite. In the middle of lockdown a client needed to spin up some virtual machine instances to demo a product to a potential client. Previous boss had been pushing a cloud-only strategy using Azure and was itching to retire all the physical servers.
Problem: can't spin up any kind of VM due to lack of Azure capacity.
me: "Well, we have that [physical] dev server which we still have, we could spin up the demo stuff on that..." new boss: "Oh, cool. Great lateral thinking!" me: <wtf?>
Demo done. Potential client happy. Boss happy.