Start-ups use AWS because with $20k-$100k in credits you can do a lot for free in the first year, and after that the cost difference usually doesn't matter. It also looks great on everyone's CV.
Big companies ofc have other reasons like flexibility, needing less coordination in the company etc.
If there were no economies of scale it certainly would seem strange that it could possibly be cheaper to rent computers from Amazon than to run your own data center.
Start-ups use AWS because with $20k-$100k in credits you can do a lot for free in the first year, and after that the cost difference usually doesn't matter. It also looks great on everyone's CV.
Big companies ofc have other reasons like flexibility, needing less coordination in the company etc.
If there were no economies of scale it certainly would seem strange that it could possibly be cheaper to rent computers from Amazon than to run your own data center.
Renting servers from Hetzner is a lot cheaper than using AWS. If you get your uplink figured out then running your own servers is also cheaper.
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Operating AWS and the datacenters involves massive economies of scale. Writing the software that powers AWS - not so much.
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