The second factor is levels of abstraction. It's cheaper to run your own virtualization software on rented dedicated hardware than to use EC2, and it's cheaper to run your own kubernetes cluster than to use EKS or GKE.
The places where having external companies do it sabes the most is (a) in running the actual hardware and networks and (b) providing a platform for your software (e.g. Google app engine).
Taking a bunch of rented dedicated servers and configuring kubernetes is cheaper than renting the computational power through GKE or EKS.
But basically yeah, these are the same standard solutions to saving money with hosting that have been pretty much known for decades.
EDIT: Be aware, this only applies for the publicly listed prices — if your company can get a deal like Snapchat did with Google, or Netflix with Amazon, then the math may work out entirely different. But I don't know what they pay so I can't comment on that.
How quickly can you scale up your design 10x? 100x?
Who needs to scale 100x in a matter of hours? For those companies, AWS may be very useful.
My entire point is that not everyone needs all the functionality AWS provides, and that’s where you can save the money.
Flexibility is a much bigger factor in using the cloud.
I've worked at organisations where "get N extra servers" was a 6-8 month process. Because of this you have to be extremely good at capacity planning.
And very few organisations are good at these guessing games.
Either you over-provision with a generous safety margin; or you don't - and your fail to handle peak loads.
Has it changed much? I haven't done real hardware in a while, but I remember the rack power to be a very limited resource years ago. (I.e. you could easily pack more hardware in the rack than you'd be allowed to power)
In London area (city and outskirts like Oxford) its £1500-2000 per 10kw and they count the PSU rating regardless of what you actually use. And that is on paper only as many DCs limit a rack to 20A which gives 4.8kw only so if you need more you need to lease another rack which costs more money. And leasing adjacent racks also isn’t really cheap they usually give you maybe 2-3 ones if you need more than that well then you are now leasing floor space which means if you need say one rack with 15kw rated bare metal you may end up having to lease enough room to hold 10 racks if not more.
This applies to AWS and GCP
That's an interesting data point considering EKS isn't GA yet.
Now we can make a simple case differentiation:
(a) EKS is more expensive than EC2. Due to Premise 1, that means EKS is more expensive than alternative hosters. QED.
(b) EKS is cheaper than EC2. Possible, but very unlikely, and I’m betting against this.