Let's say I need 50TB of usable space. I can purchase an Equallogic PS6100E (a mid-level "enterprise" storage device) with twenty-four 3TB drives and 5 years of support for $85,000. Rack space and power isn't free, so let's say the total cost of equipment and facilities over 5 years is $100,000.
In contrast, storing 50TB for 5 years on S3's reduced redundancy storage would cost $250,000. If I ever need to transfer any of that data back to my data center, there'll be a hefty bill for that as well.
Except to get the same redundancy as this AWS product you would need a replica of this storage device in at least 2 other datacentres, you would have to ensure you have enough spare capacity lying around for any snapshots you take and have to buy or build software that manages this 3-way data synchronisation between sites.
Also, you seem to be forgetting that you still need local storage for your images anyway. This is a hands-off backup and disaster recovery product.
For full disclosure, the Storage Gateway's pricing isn't the same as S3's at the moment. They only have one storage tier and it is $0.14 per GB, no discounts. Therefore, 50TB of storage over 5 years is $420k.
Having said that, what would it cost to:
* Not only have your primary but 2 x secondary PS61000E's.
* 2 extra datacentres with connectivity to themselvse and your primary site.
* Software to manage asynchronous streaming of data from your primary to 2 x secondaries.
* Software to take consistent backups of these images and store in at all three locations.
* Software to ensure that your secondary sites contain only encrypted data.
* Cold-spare hardware at a secondary site capable of running all your images.
With Amazon you could facilitate a DR onto their other platforms.
With your Equallogic example you would need to mirror that data to another device with recovery targets in another location.
In contrast, storing 50TB for 5 years on S3's reduced redundancy storage would cost $250,000. If I ever need to transfer any of that data back to my data center, there'll be a hefty bill for that as well.