[erik_seaberg]

You lease colocated servers at more competitive rates (power and bandwidth included), or buy them and install them in leased racks, or build your own datacenters. Cloud providers charge a lot in return for not requiring this kind of commitment; they have to amortize datacenters and support staff with a lot of spare capacity.

[scarface74]

Yes and they also let small shops actually spend their time developing software instead of managing infrastructure. I know how to and have done all of the infrastructure and managed services that we farm off to AWS.

You can get away with a lot less dedicated infrastructure staff if you use your cloud provider as more than just a glorified overpriced colo and actually take advantage of their managed services.

Just to keep comments from going off the rails and everyone says it’s a mistake not to have dedicated “infrastructure people”. I’m a software engineer still by choice, but I have turned down a few offers as an “AWS Architect”.

[Gibbon1]

My thought on that is your rough revenue over infrastructure + development + maintenance cost is what matters. There is google/facecrack in one corner of that problem space and a chain smoking accountant with a ledger in another corner. You are likely not in either of those places.