Ah, so now the developers will service the AWS instances from your end which means they can work less on delivering new features... also left out of the equation quite often :)
They’ll also wait less for IT to service their tickets requesting new infrastructure, which leads to more new feature development. There are a variety of trade-offs; not all of them have the same sign.
For example, hardware doesn't just survive five years. As the hardware ages, the failure rate will increase. This calculation doesn't even mention this at all.
Regardless of a warranty, the hardware still fails and needs to be replaced. That requires maintenance. Beyond that, can they afford to wait for Dell to fix the faulty device or send a replacement, or do they need several spare units to address outages quickly.
Do you think that would make any impact at all when they'd be looking at a $400M difference in hardware costs? People these days act like you need 5 PhDs to plug in a computer, it's insane.
E.g. this article is missing even basic stuff like the (prorated) salary costs of employees buying, installing and servicing the hardware.