[falcolas]

On a tangent from the sibling comments (which are spot on), colocation does exist. They handle the network drops, power, security, cooling, and you just have to ship them servers. Before AWS, this is how most businesses ran (including Amazon).

Few businesses ever get to the point where they need to run their own datacenter. And when they do, the costs would be roughly even or lower to AWS due AWS' markup (for handling those DC-related things for you, plus profit).