Note: I manage dedicated-server hosting and all web services on Titanfall @ Respawn.
Surely your calculation doesn't / can't include bandwidth charges? And if you have Windows hosts... cloud screws you too.
You're not wrong that it takes a lot more machines than most shops need, and if you can make your scale elastic, 150 machines probably goes a long way! And to your point, developers undervalue their time a lot, and dealing with colocation and sourcing of hardware and backups can be a real drain to save some on CapEx.
Our transit costs out of our Colo in Santa Clara are $6K/month for two dedicated gigabit lines. That translates roughly to 518 TB of data transfer a month if we could keep the pipes fully lit 24/7. Cogent has offered to make one of our gigabit lines burstable to 10G if we would like, same cost if we don't exceed a monthly average use of 1000Mbps.
And we use Linux so no Windows hosts charges.
There are more and more tools that are force multipliers for your Site Reliability Engineer (SRE) equivalents. You can't avoid swapping out dead drives, but with the right systems architecture you can make it pretty painless.
It's possible to only pay the lower end of that range for a 2Gb 90th percentile commit on a 10Gb connection out of most major markets. Cogent pricing fluctuates wildly depending on your ability to negotiate.
Ignore the whole song and dance when they have to bring in a VP into the call to specially approve the pricing they're trying to pitch to you at. Those are standard transit sales tactics. Or avoid Cogent's sales entirely by working with a reseller.
Speaking with the VP to Negotiate for transit prices? Sounds like a pita. AWS knows that you're an engineer who just wants to write code and has made that as frictionless as possible.
This goes back to my first point in that going into the DC requires staff with very different skill sets. It's not that it's not worth it, but there's a lot of costs involved part from the per-hour instance cost.
He's paying 2-3x market (although 2Gbps isn't huge). Cogent is pretty much bargain-basement, too.
I wish the industry would stop quoting prices they way we do (USD/Mbps, so e.g. $1.20/Mbps); Gbps is probably the right unit now, and it may make more sense to invert.
But there are lots of terms involved in a transit contract; unless you're buying tens of gigs, crossconnect, port cost, commit, etc. may be more meaningful than per-Mbps cost. And pricing often depends greatly on exactly where in a city you're buying (at IX, carrier neutral facility, etc. will be cheapest; off net building or monopoly building will be most expensive) -- and of course Cogent transit vs., say, Level(3) transit are only superficially the same.
AWS/GCE/Azure are all really expensive compared to even good multi-homed transit. If you push more than 10TB and you don't need multi-homing you are already ahead.
If you do need HA multi-homed transit you are looking more at 50-100TB or so but still, there are a lot of places that easily do that every month, especially if you are doing cross-DC storage replication for example.
Surely your calculation doesn't / can't include bandwidth charges? And if you have Windows hosts... cloud screws you too.
You're not wrong that it takes a lot more machines than most shops need, and if you can make your scale elastic, 150 machines probably goes a long way! And to your point, developers undervalue their time a lot, and dealing with colocation and sourcing of hardware and backups can be a real drain to save some on CapEx.