you can buy your own servers, however it's hard to say whether or not I would recommend that. If your load is fairly constant there isn't any reason not to buy enough capacity to support your base load with AWS spinning up only during peak hours.
If on the other hand your load is highly variable investing in your own infrastructure may not be worth it. The other thing to factor in is how much it costs to maintain 99.99% uptime, that would require 2 locations able to handle your base load, so that's 2 fully redundant stacks of equipment out of pocket, in addition to 2 internet connections. If you go with two datacenters where you rent Rackspace you need to calculate their costs and make sure the contract doesn't have any nasty surprises, and includes onsite support.
The numbers aren't necessarily smaller for a fairly low load, unless you just throw a server in your closet and cross your fingers. But then you are at much higher risk of downtime. Also you need to account for someone to maintain that server.
