One year of a a1.2xlarge 8vcpu 16gb RAM costs $1782.144 excluding storage. I could build a pretty decent server with that money that would last easily half a decade if not longer.

I could double the cores and mem probably too.

AWS uses the industry standard financial model for leased infrastructure with EC2 instances: all offered pricing structures recover hardware costs at 6 months. After 6 months, your cost basis is OpEx only. The margins on month 7 and beyond are very good.

If you operate at sufficient scales to amortize the fixed overhead of operations (which is not that large of a scale), you can break even running your own server infrastructure within 12 months versus AWS if you know what you are doing. That last part is a big caveat, but not a large hurdle.

There are other considerations but in pure hardware terms, on AWS you've bought the hardware after 6 months of utilization.

Let's be fair, you are actually paying extra for elastic capacity. I.e You expect to have a 2nd Server Ready when ever you need. Not to mention the Cloud is suppose to add a little redundancy, so in case your server fail you could switch on another in an instant.

So in reality I will always times the cost of server ( over X months period ) + colocation / month by 2.5. And Double that to give them Margin for support etc.

That is roughly 5x the cost. And in most cases seems to be what AWS is charging for.

Not saying I agree with their pricing.

If all you want is a development machine and electricity is not particularly expensive, you can buy a used 32-core, quad socket Xeon with 128GB of RAM for half that. Dell r910 or similar. It's about a 500W load.

Or you could get an eight core / 32GB ram machine for under $230 on eBay.

How much would you charge to buy this machine, rent a space to put it in, pay for the utilities and rent related to it, set it up, and consequently maintain it for half a decade? In addition to the principal of purchasing the hardware?

Not a lot. Installing Linux is trivial. Server hardware rarely breaks outside of disks which are trivial to replace as well.

In the real world: UPS,generators, cooling, BIOS/management card patching, 100 gigabit switches, optics, cabling, monitoring, tamper-proof logging, SEIM, cameras, physical security, software licenses. Plus maintenance on all that stuff.

Oh and you need a DR site too, so double it.

And staff up 4x for 24x7 operations and build an orchestration layer yourself.

I’ve done the math in a lot of scenarios, including (especially) staff time. Running your own real data center doesn’t make long-term financial sense unless you are in the mid-hundreds of physical servers.

Colo might make a bit more sense for some situations, but there’s a reason so much is being moved to cloud providers. The people doing it aren’t stupid.

How does the yearly cost change if it becomes an upfront paid reserved instance over 5 years?

My guess is the advantage evaporates.

Let's do the math. An a1.2xlarge reserved instance with the longest available term (3 years) is $672/year, or $3,360 over 5 years.

A bit of browsing on Geekbench suggests that one a1.4xlarge instance (i.e. two a1.2xlarges) is roughly comparable to a Ryzen 3400G. Adding in rough costs for the other components (motherboard, power supply, case, and 32GB of RAM), a bare-metal system equivalent to an a1.4xlarge looks like it would cost maybe $500-600 to buy outright.

In other words, if all you care about is raw CPU performance, then over long periods of time AWS costs more than 10x as much as bare-metal per unit of performance, even with up-front reserved instances.

Except we are talking about a2’s (m6g) brother, the whole point is that the math changes significantly with these new instances. The a1 was not competitive.

I recently provisioned a "micro-" instance...the smallest possible server available, as I fell hook, line, and sinker for the "FREE 12 months!" promotion that turned out to be totally false.

For 3 months, I was charged $11,$23, and finally $4 for 3 days of the 3rd months, where I QUICKLY cancelled the server...this is OUTRAGEOUSLY expensive for a single processor, 1G RAM, 30GB SSD cloud server!

$37 for some 64 days is totally overpriced. You can get high quality low cost cloud servers for less then $5/month, and if you purchase a full year, half that.

Amazon really disappointed me with their FREE bait-n-switch bullshit marketing, and I will NEVER recommend their low end servers again.

Having definitely gotten out for $0 on the free tier, it sounds like you somehow ended up with other services or on an instance type that was not free tier eligible.

Which isn't an accident, to be fair. AWS pricing is deceptive on purpose, with many cross-dependencies that each have their own price points, exclusions, and caveats.

Only this many cents to use this thing, which, heh, I guess it requires this thing too, and this thing, and this thing ... man, some of these cents are adding up. Oh, a "NAT Gateway" is $30/mo? Well, OK. Keep going for a few weeks and you're staring down a bill for a rather scary number of cents while the CFO's angry rants can be heard half-way across the office.

There are entire consultancies that specialize in decoding AWS bills. Let's not pull leg here.

Do you have any evidence that their pricing is confusing on purpose?

How much data center does one really need for a build server?

A lot if your expectation is to have it "just working" all the time.

Although that can be a consideration, we started this thread talking about dev/test environments, where you just don't need that many 9s.