EDIT: As suggested below by toomuchtodo, at this level of deployment - Colo would be cheaper.
Its not cost effective compared to hiring ops and colo'ing it yourself. Once you're large enough, you hit tipping points:
* When to move from cloud to dedicated equipment
* When to move from dedicated equipment to someone else's colo (usually Equinix, but lots of providers in this space with varying levels of "warm fuzzies", which would cover on site techs, power and network redundancy, diesel commitments, and so on)
* When to move from someone else's colo to your own datacenter
(or in the other direction, depending on business requirements)
It also helps that US tax code (Sec 179) provides gracious depreciation schedules for physical compute/network/etc, which means that profit spread between cloud providers and you running your own gear goes back into your business or into your pocket
Disclaimer: 15 years of ops experience, including selling hosting to Fortune 500 companies as well as helping companies move from cloud to on-prem as well as the other way around. I've had to run cost/benefit analysis for this most of my career.
There's a sweet spot between 1 server and some number, say into the hundreds, where OVH is still cost effective. Beyond that you'll absolutely want to roll with your own gear because you can negotiate for a whole cage instead of partial racks.
We know from experience that public cloud is a huge money sinkhole compared to running your own cloud on bare metal (we use proxmox).
I'm sure you know operating costs better than we do though, we don't have our own Datacenter.
The cloud part was just an example of a tipping point and not the main point of the comment.
200 servers (at least the one we were interested in) would cost us around $22k on OVH each month. That means if I remove the personal that I would have to hire, the cost of servers is now down to $6k/month (200/12). For that money you can't really find a better option.
In our case, where we are running thousands of severs on any given time, the flexibility is much more important than price. So we built our service around pre-emptible instances on GCE (the same as spot on AWS). You can't beat dedicated server in performance, but it's close enough and they're making for it by having a great infrastructure.
We are not a direct cost center that can be discussed in those terms. Our insight will reduce capital and operational expenditure beyond our salary, because that operations hire would have told you how insane of an idea paying $22,000/mo for four cabinets of gear is and why a capital tradeoff with depreciation is a fiduciary responsibility to your investors and shareholders. You can buy at least a dozen U for that each month and then pay for nothing but where it lives with a dash of break-fix to taste.
I can put four cabinets of gear in a colocation for a quarter or less than that if you'd swing a little capital. You are wasting money on poor operations architecture and design and you don't have anybody to really tell you.
Even beyond that operations is a skill, much like marketing. I know a lot of people think they can fake it for a while (and they usually can), but after a point it's time to act like a grown up company and bring someone who does nothing but think about this shit on board. Security, performance, remediation, all the system level grunt work you shouldn't be concerning yourself with as engineers. Or you can keep throwing multiple operations salaries at your four cabinet OVH deal and keep getting ripped off.
> "You can buy at least a dozen U for that each month and then pay for nothing but where it lives." We don't need dozen a month. We need hundreds now. We may not need them in 6 months though and then what? Will I rent them out?
https://www.ovh.com/fr/support/service-client/support-vip.xm...
Edit: English here under support button https://www.ovh.ie/support/contact-us/
