The math should also include the price of the staff who babysit 625 spinning metal disks, who likely drive to a data center multiple times a week to swap failed drives. I shudder to think if this job fell in my lap!

> 625 16TB drives is $400000

how much is the real estate cost of 625 drives and associated machinery to run it?

At a guess, AWS has an operating margin of about 30%, so you can approximate their cost of hardware, bandwidth, and other fixed costs as 70% of their sticker price. As a start up, can you actually get this price to be lower? I actually dont think you can, unless your operation is very small and can be done out of a home/small office.