"The price premium of using AWS is high enough that it's trivial to afford leasing tons of excess capacity to handle failures and still save tons of money."

"AWS certainly is convenient, but it's also so expensive I'm charging my highest day rates ever for projects to help clients move off AWS these days."

This is FUD and nothing more than FUD. As bad as the article the other day that said a company saved 50% moving off AWS. Show me a company that can save 50% by moving off AWS, and I'll show you a company that isn't using AWS properly at all.

When you compare a single piece of hardware that you can buy and run yourself to an instance in EC2, you are leaving a lot off the equation.

Such as:

Deployment tools (CloudFormation, CodeDeploy, EB, OpsWorks)

Monitoring tools (CloudWatch (sure it leaves some to be desired)

Machine Image building/tracking tools

Hardware provisioning tools

Security tools ( Security Groups, NACL's in VPC, plus the stuff you don't see in the infrastructure)

More varied hardware than you'd have in house.(different amounts of ram/cpu/storage).

More hardware than you'd have in house. (no need for spare parts cabinets, waiting on vendors for replacements).

Storage (EBS, S3, local).

When you pay for EC2, you get all of this. Doing this yourself isn't free in any way shape or form, even with opensource tools. A company with a good ops team that is cloud savy is going to be several times more effective at a smaller size than a team that has to manage a datacenter, all the hardware, and all these other bits. Folks discredit all of these when they do apples to apples comparison of hardware you can buy to a service that you use.

Let alone that most people don't understand per-server network, space, and power cost over its lifecycle. (I've spent months with companies doing datacenter ROI analysis and having no idea what things cost).

And going to a managed hosting provider, you're either locking yourself into the frozen tech world they are in, small development resources, and typically constrained resources. You don't hear of managed hosting providers building any of the above themselves, so you continue to have a higher management overhead than a true cloud provider like GOOG, AWS, MSFT.