In my experience, doing things in the cloud is about as expensive per 12-18 months as buying the hardware up front is. That's super interesting for a fast growing startup that could go bust any minute and wants to spend every second of their time on growing, expanding and marketing.
But when you're spending so much on AWS you can save millions just by reducing filesystem overhead by 20%, it should have stopped making sense a while ago. $2 million should get you a team of 10 sysadmins and devops engineers. Sure automation would be more difficult, but you'd have the manpower to achieve it. Isn't that what running a business is about?
Flexibility, when you're growing quickly it's nice that you can provision new hardware instantly, but AWS is so expensive you could continuously over provision your hardware by 50% and still always be ahead of the AWS price curve. And as I said, you could fully swap out your hardware every 18 months and be at the same price basically. You could even hire a merchant to offload your old hardware and recuperate 50% of those costs.
And I'm not saying to throw AWS overboard altogether, that you have your core business outside of AWS's datacenter doesn't preclude you from buying into RDS, Kinesis, S3.
Is AWS just cutting you more financial slack than we're getting as a tiny company? Or am I underestimating the costs of getting that sysadmin team on board?