Is it not possible that the peak load is more than 3x the average load? With your own hardware you have to be provisioned for peak load 100% of the time.

> Oh, did you know you can do the same thing at other providers for cheaper? :|

https://www.stormondemand.com/servers/baremetal.html 32/64GB - $0.75/hr

https://www.linode.com/pricing 20/64GB - $.96/hr and bandwidth

http://aws.amazon.com/ec2/pricing/ 16/64GB - $1/hr + bandwidth costs @ [varies]

Even if you take your premise at face value, AWS is literally the most expensive option.

Personally, I've never seen a real world use case where you dropped below 33% capacity. In practice, you can get hourly billing for cheaper than AWS anyway with providers large enough to meet most customers needs.

Linode, and most alternatives, don't have S3/Blob storage as a service.. also missing are distributed key-value storage as a service and sql as a service.

Generally, with any given service as you can scale it makes sense to run your own instances.. but realistically someone who knows insert-tech better than AWS/Azure admins is a pretty rare breed, and having to in-source those specific skills costs in terms of time and money, redundancy even more so.

If you have a team of 3-5 people, you can do far more with AWS or Azure than you can most alternatives... Employees aren't free.

Really? could you elaborate on these other providers? I would expect at least, VPS, remote files (S3/Azure-Blob), distributed key-value store as a service, some SQL variant as a service, and load balancing as a service. Most of the alternatives I've seen don't offer those services, and most only do VPS.