So, my experience-

I worked for a small (~300 headcount) software company that did CFD software. We were told to build out our HPC capacity so that customers could use our hardware to run their jobs instead of having to manage a cluster themselves to run our software. The software was billed per core-hour, and that was the only charge. It made no difference if you ran it on your infrastructure or ours-there was no additional charge for our compute or storage or network bandwidth.

We bought compute in units of between one and four racks fully populated, usually lease with a trivial buyout at the end, or just outright.

In the last 24 months we were an independent company, our SaaS infrastructure drove an additional $24 million to EBITDA. In that increment, we spent $9 million total on hardware, colo, network connectivity and our salaries. The total cost of replicating our compute capacity (for those 24 months) on AWS was ~$31 million. This all came out on the due-diligence that we had to do as we were being bought by a larger firm, so the accountants were satisfied that the numbers were accurate.

IOW, the article seems to be completely plausible.

Providers like OVH, Hetzner, etc will provide you servers and handle maintenance just like cloud providers, and it turns out that in both cases you need to hire sysadmins (or "DevOps" engineers). You don't need extra staff unless you do actual on-prem which very few companies need (most can be served by a provider like the aforementioned ones).

Did you see how much we saved comparing to AWS? We could even hire an admin for each of 850 servers and would still have money left. But we have only one person taking care of hardware replacements. That is enough for the whole setup.

Sorry, but if I'm reading the article correctly you didn't save any money, because you weren't using AWS in the first place. All you did was to do some back of the napkin math what it might cost you to run something on AWS.

Isn't it how you save money by picking cheaper product instead of more expensive? We save by buying hardware and renting DC space. If we were using AWS we would not save.

predictions are hazy, hindsight is 20/20. There's a reason there are dozens of companies dedicated to cutting cloud costs because surprise, they aren't configured well. Most of these probably severely overestimate compute needs and don't factor things like autoscaling.

You still need a team to manage the stuff on AWS. Probably the team needs to be even bigger.

If you’re a business leader, you‘re probably just blindly following what your peer business leaders are doing, that’s why you’re on AWS (in most cases at least)

Also, the comparison used 3-year reserved instances (if I read correctly) but didn't have a pricing plan (the part of the contract with AWS that specifies your discount). $400M->$300M if you know how to negotiate (I'm an engineer but to save $5M I learned how to negotiate. It's unpleasant but effective).

What I'm struggling with is their estimate. I work for an enormous enterprise that runs tons of stuff on the cloud and our budget is less than a quarter of their AWS estimate. We avoid products like EBS unless they are necessary, and use RDS whenever possible.

IME, business "leaders" follow the crowd even more than venture capitalists. If AWS gets frequent glowing praise in CFO Magazine, then by golly, we're going to move to the cloud and "save a bundle". Make enough similar decisions without actually being able to properly cost estimate the intangibles of what else is lost when those couple dozen experienced systems engineers move on, and you end up being valued at one-tenth of what you used to be within a few years (as is the enterprise where I was such an engineer).