AWS is still 10x-100x more expensive than renting bare-metal unmetered servers and running everything yourself, so I don't think the actual hardware factors too much into their pricing.
This is so utterly untrue and directly related to what Linus was talking about.
Those bare-metal servers are basically 1:1 what you are developing on.
I can install an instance of my application
on them in minutes.
It's AWS that takes significantly more time to set up and learn.
Most people using AWS are spending big bucks on an 'automatically scaling'
architecture (that never just works) that will cost them many thousands of dollars a month, which they could have comfortably fit on a 30 bucks dedicated server.
You can pay a dedicated system administrator to run your server (let's not kid ourselves, you probably just need one server) and still save money compared to AWS.
With AWS you're not only paying Amazon, you're probably also paying someone who will spent most of his time just making sure your application fits into that thing.
Take my use-case for example: I can run my entire site on about 8 dedicated servers + other stuff that costs me ~600-700 euros a month.
Those just work month after month (rarely have to do anything).
Just my >400TB of traffic would cost me 16,000 bucks / month on AWS. I could scale to the whole US population for that money if I spent it on dedicated servers instead and just ran them myself.
My situation is similar to what chmod775 describes.
We serve 200+ TB/month, and no we didn't just forget to use a CDN ◔_◔ Those cost money, too.
For us, cloud is about double - $10k/month more - than dedicated boxes in a data center. I've run the same system in both types of environments for years at a time.
For us, cloud is basically burning money for a little bit of additional safety net and easy access to additional services that don't offer enough advantage over the basics to be worth taking on the extra service dependency. It's also occasional failures behind black boxes that you can't even began to diagnose without a standing support contract that costs hundreds or more a month. Super fun.
High bandwidth and steady compute needs is not generally a good fit for cloud services.
To break through any floor requires a disruptive change in architecture (CPU or otherwise).
https://docs.aws.amazon.com/AWSEC2/latest/UserGuide/using-sp...