Yes you have to think of the overhead. It's not just buying a rack and some hardware. You need power, cooling, standby generators, redundant internet connectivity, firewalls, people who know how to run all of those things, and people to manage those people.
Amazon and Google and Microsoft spread the cost of all of that out over many customers, you're paying for it yourself if you're doing it yourself.
As long as there is no collusion, having at least a few big cloud providers should eventually drive prices down to close to the marginal cost of providing the service. Your job is to avoid lock-in to any specific provider's platform.
Most people rent rack space, or cages, rather than build data centers. I worked at Yahoo back when they were still 10k employees, and "their" data centers in London were still someone else's - they rented cages (if you haven't worked in coloed data centers before, you can rent by the 19" inch rack, or sometimes fractions, or you can have them wall of a section for just your racks).
This is a commodity service - there are several data centers within 20 minutes of me, and dozens within an hour.
All of the services you list, including the staff and access to them on a per incident or per hour basis is a commodity to the point that owners of these providers are increasingly real estate companies because they are "boring", relatively low margin plays priced by the square metre and kilowatts of power and HVAC capacity, not tech companies.
So is services for these data centre operators. There's a company within walking distance of me whose sole product is software for optimising HVAC costs for data centers.
My current employers core offering is digital twin solutions - being able to model and collect data from building sensors. Turns out a data centre needs mostly the same set of sensors as any other modern building. Just different densities and layouts. Yes, you want raised floors for cable ducts. Most offices have dropped ceilings for the same reasons but less volume.
It's a basic real estate play, and building your own is not where you save over a public cloud unless you're a unicorn, because you can recapture most of the margin by going to a provider that doesn't hide that from you.
It's a basic real estate play - the margins when you rent Colo space are nowhere near AWS level margins.
It’s still mostly done that way except you rent rackspace from equinix, coresite, etc and they buy transit separately from isp. Doesn’t make sense to build until you’re spending tens of millions a year on colos
Yes, but your offering doesn't have to be so general as for instance on your hardware there does not have to be any sharing of resources with non-trusted parties. You also don't need a lot of the accounting and billing stuff internally. And in general, if you are willing to drop a nine or two on availability/ reliability, the costs fall much further down.
Obviously, you have to do your own estimates and calculations but beating AWS on price in certain areas isn't really hard even if you just use a different hoster/ cloud.
Source: Ran a SaaS business with a fraction of the cost that I normally hear from people.
We used to price out an AWS transition every year at an old job. As well as managed hosting providers. 6-7 years in Hetzner reached parity with our colo setup and we started using them (our colos were near London, with London real estate prices). AWS however never got within a factor of 2.
Which is fine for many businesses where a 2x on hosting does little to your margins, or you e.g. serve customers whose infra is in AWS, but for my employer at the time, moving to AWS would have meant bankruptcy.
Amazon and Google and Microsoft spread the cost of all of that out over many customers, you're paying for it yourself if you're doing it yourself.
As long as there is no collusion, having at least a few big cloud providers should eventually drive prices down to close to the marginal cost of providing the service. Your job is to avoid lock-in to any specific provider's platform.