It's difficult to top AWS just based on an apples-to-apples comparison of buying servers versus turning up EC2 instances. EC2 is pretty price aggressive if you know what your needs are, identify an instance type that fits well, and reserve it for 3 years. A lot of people don't actually achieve all three, but it's often possible.<p>Most comparisons overlook the crucial price differentiator between AWS and a datacenter build: bandwidth costs. AWS bills based on bytes transferred, every IP transit provider bills by 95th percentile or similar.<p>A 1 gig commit on a 10 gig circuit is $1-2/meg in a well served on-net building, so let's say $2000/mo. The switch is $5000 or so, something that can't do full table BGP but is layer 3 capable, and support is $1000/yr. The cross connect is $300/mo. Plus a little bit more for optics and fiber. Over three years the cost is $91,000 (plus power to run the switch), if you never go above the 1 gig commit. Seems like a lot of money right?<p>Compare this to transferring 500mbit/s constantly to the Internet over 3 years at AWS pricing. That amounts to 156 TB / month transferred. Per month that will cost $11,878.40. Over 3 years the cost is $427,622.40.<p>There are some other key differences between AWS and datacenters:
- it puts all of your spending into opex, eliminating capex (this matters for some businesses);
- it limits the ways you can solve problems, there's no VRRP support for example, which is very limiting for a lot of service types;
- there is no ability to peer or receive settlement free transit if you deploy in AWS<p>However, in terms of raw dollars, the method that AWS uses to bill bandwidth consumption is always the major cost differentiator.