[secabeen]

>There are so many other costs to running your own datacenter besides the servers and the space, which Amazon gets to amortize over all their customers, but you have to bear 100% on your own.

Yes, but those costs may be low (or zero) for you, but Amazon has to architect at a level much higher than that. For example, I have researchers with data that has zero backup/DR requirements. This is 10s of TB of data, but if they lost it all due to a fire or a catastrophic system crash, they would just shrug, order a new storage array from the insurance money, and request new copies of the data from the research labs at other institutions that also have it. Amazon doesn't offer any storage products at that reliability level, and the ones that are even close have significant data access latencies or file transfer costs to run analysis over a significant chunk of the data.

So, they buy a basic NAS, stuff if with 12T drives, and pay $0.19/Gig for it. That's one time, not monthly, and at only 50% utilization. Assuming S3 Reduced Redundancy is $0.02/Gig/mo (it's actually a little more, but we're being generous), they start saving money in month 10 not counting the data transfer or compute costs associated with processing that data either locally or in the cloud.