> Finally, how many real system administrators still exist

... a lot? Has there been some shortage of network/infrastructure people lately?

Well, considering how many small/startup shops expect the developers to also do IT chores, "the cloud" makes the most sense... spending time learning the insides of systems they don't care to truly maintain comes at a cost... time to do other things, or cost to pay someone else to do it.

In the end, the cloud makes sense in a lot of scenarios.

"The cloud" does not mean you don't need real system administrators. I see time and time again companies get bitten by this. Overall devops efforts to run this well on AWS or GCE in my experience tends to be higher than provisioning dedicated systems because you have so many artificial limits imposed on you by the providers that makes things harder.

E.g. your example: Understanding how to connect everything to the network without getting hacked is far easier when your private network is physically wired to a separate switch, and your public network is physically behind a firewall and there's no configuration mistake in the world you could do that would change that, so the problem-space to get basic levels of security is reduced to configuring the firewalls correctly.

Still plenty of room to shoot yourself in the foot, but in my experience far less so than having people configure their own networking on AWS.

As or pricing, yes, if you want to do colo, the initial costs are higher. But dedicated rented servers with monthly contracts are also typically far cheaper than AWS for anything that stays up for more than ~1/3 or so of the time (obviously depends on the hosting povider). If you regularly spin up lots of instances for a short period of time, you should use AWS. But the moment you stop spinning them down again, it's time to rent capacity somewhere else.