Yes. Why? Cost, availability, flexibility, bandwidth. For a lot of companies, on-prem servers are the best solution for efficiency and cost.
One great example. We were paying $45k/yr for a hosted MS Dynamics GP solution. For $26k we brought it in house with only a $4k/yr maintenance fee. We bought a rackmount Dell, put on VMWare, have an app VM and a DB VM. My team can handle basic maintenance. In the past 11 months we haven't had to touch that server once. We have an automated backup, pulls VMs out daily and sends them off to Backblaze. Even if we need to call our GP partner for some specialized problem, it's not $45k/yr in consulting costs.
We had a bunch of Azure servers for Active Directory and a few other things. When I came in 2 years ago I set up new on-prem DC VMs, and killed out absurd Azure monthly bill, we were saving money by month three. A meteor could take out Atlanta and the DCs are our satellite offices would handle the load just fine until we restored from backups and we'd STILL save money. We've had MORE uptime and reliability since then too.
If I have a server go down, we have staff to get on it immediately, no toll free number to dial, no web chat to a level 1 person in India, etc.
Our EMR is hosted, because that's big enough that I want to pay someone to be in control over it, and someone to blame. However, there have been many times where I'm frustrated with how they handle problems, and jumping from one EMR to another is not easy. And in the end they're all bad anyway. Sometimes I DO wish we were self hosted.
The Cloud is just someone else's computer. If they're running those machines more cheaply than you are, they're cutting out some cost. The question is, do you need what they're cutting?
> The Cloud is just someone else's computer.
Well, not if it's private cloud, and only partially it's hybrid cloud. Cloud is dynamic provisioning, public cloud is cloud that is also on rented hardware.
> If they're running those machines more cheaply than you are, they're cutting out some cost.
Economies of scale are a real thing.
> The Cloud is just someone else's computer. If they're running those machines more cheaply than you are, they're cutting out some cost. The question is, do you need what they're cutting?
They're cutting overhead and getting better deals on hardware than you could ever get.
Their efficiency is their profit margin.
This person is not payong overhead of developing and running 500'th AWS service with confusing name that they will never need. Just saying 'economies of scale' is a banality, everyone past schoolage knows about them.
> Their efficiency is their profit margin.
Last time I checked, AWS had a profit margin in the 40%-50% ballpark.
Sorry, but the semiconductor industry doesn't operate with any kind of markup that would allow such profit margins from "getting better deals on hardware". The only one able to make that kind of profit used to be Intel on high-end server CPUs, and even they are now pressured by AMD and custom ARM silicon options. Anything else needed for a server, RAM or flash chips or whatever, is usually selling on thin single-digit margins.
Cloud provider profit margin is perfectly logical and explainable through lock-in effects keeping their customers paying big markups to stay in AWS infrastructure. Be it software that was built against AWS proprietary services, be it having the necessary engineering skills to manage AWS infrastructure in the team but lacking the skills to manage on-prem hardware, be it the enterprise sales teams of cloud operators schmoozing CTOs of big corporations and making them jump on a "going into cloud" strategy as some kind of magic bullet to future-proof their corporations' IT, be it the psychological effect that makes "using the cloud" apparently a mandatory thing to be "cool" in todays' silicon valley culture, and therefore by extension the whole worlds' IT engineering culture.
The most ironical of them all is this weird effect that drives people to rationalize these things, writing comments like yours, because nobody likes to admit they've painted themselves into a corner of lock-in effects. And of course there's the irony of this all being history repeating itself: anyone still remembering when IBM dominated the IT industry?
> that would allow such profit margins
The percentages don't quite hit that amount of discount, but they are much much higher than (I at least) expected.
> Their efficiency is their profit margin.
Then why does outbound bandwidth cost so much more with AWS than smaller providers?