I work for a 50 person subsidiary of a 30k person organisation. I needed a domain name. I put in the purchase request and 6 months later eventually gave up, bought it myself and expensed it.

Our AWS account is managed by an SRE team. It’s a 3 day turnaround process to get any resources provisioned, and if you don’t get the exact spec right (you forgot to specify the iops on the volume? Oops) 3 day turnaround. Already started work when you request an adjustment? Better hope as part of your initial request you specified backups correctly or you’re starting again.

The overhead is absolutely enormous, and I actually don’t even have billing access to the AWS account that I’m responsible for.

You're assuming that hosting something in-house implies that each application gets its own physical server.

You buy a couple of beastly things with dozens of cores. You can buy twice as much capacity as you actually use and still be well under the cost of cloud VMs. Then it's still VMs and adding one is just as fast. When the load gets above 80% someone goes through the running VMs and decides if it's time to do some house cleaning or it's time to buy another host, but no one is ever waiting on approval because you can use the reserve capacity immediately while sorting it out.

The SMB I work for runs a small on-premise data center that is shared between teams and projects, with maybe 3-4 FTEs managing it (the respective employees also do dev and other work). This includes self-hosting email, storage, databases, authentication, source control, CI, ticketing, company wiki, chat, and other services. The current infrastructure didn’t start out that way and developed over many years, so it’s not necessarily something a small startup can start out with, but beyond a certain company size (a couple dozen employees or more) it shouldn’t really be a problem to develop that, if management shares the philosophy. I certainly find it preferable culturally, if not technically, to maximize independence in that way, have the local expertise and much better control over everything.

One (the only?) indisputable benefit of cloud is the ability to scale up faster (elasticity), but most companies don’t really need that. And if you do end up needing it after all, then it’s a good problem to have, as they say.

I’ve never worked at a company with these particular problems, but:

#1: A cloud VM comes with an obligation for someone at the company to maintain it. The cloud does not excuse anyone from doing this.

#2: Sounds like a dysfunctional system. Sure, it may be common, but a medium sized org could easily have some datacenter space and allow any team to rent a server or an instance, or to buy a server and pay some nominal price for the IT team to keep it working. This isn’t actually rocket science.

Sure, keeping a fifteen year old server working safely is a chore, but so is maintaining a fifteen-year-old VM instance!

There is a large gap between "own the hardware" and "use cloud hosting". Many people rent the hardware, for example, and you can use managed databases which is one step up than "starting a vm".

But your comparison isn't fair. The difference between running your own hardware and using the cloud (which is perhaps not even the relevant comparison but let's run with it) is the difference between:

1. Open up the cloud console, and

2. You already have the hardware so you just run "virsh" or, more likely, do nothing at all because you own the API so you have already included this in your Ansible or Salt or whatever you use for setting up a server.

Because ordering a new physical box isn't really comparable to starting a new VM, is it?

Before the cloud, you could get a VM provisioned (virtual servers) or a couple of apps set up (LAMP stack on a shared host ;)) in a few minutes over a web interface already.

"Cloud" has changed that by providing an API to do this, thus enabling IaC approach to building combined hardware and software architectures.

You have omitted the option between the two, which is renting a server. No hardware to purchase, maintain or set up. Easily available in 15 minutes.

3. "Dedicated server" at any hosting provider

Open their management console, press order now, 15 mins later get your server's IP address.

You gave me flashbacks to a far worse bureaucratic nightmare with #2 in my last job.

I supported an application with a team of about three people for a regional headquarters in the DoD. We had one stack of aging hardware that was racked, on a handshake agreement with another team, in a nearby facility under that other team's control. We had to periodically request physical access for maintenance tasks and the facility routinely lost power, suffered local network outages, etc. So we decided that we needed new hardware and more of it spread across the region to avoid the shaky single-point-of-failure.

That began a three year process of: waiting for budget to be available for the hardware / license / support purchases; pitching PowerPoints to senior management to argue for that budget (and getting updated quotes every time from the vendors); working out agreements with other teams at new facilities to rack the hardware; traveling to those sites to install stuff; and working through the cybersecurity compliance stuff for each site. I left before everything was finished, so I don't know how they ultimately dealt with needing, say, someone to physically reseat a cable in Japan (an international flight away).

There is. Middle ground between the extremes of those pendulums of all cloud or physical metal.

You can start with using a cloud only for VMs and only run services on it using IaaS or PaaS. Very serviceable.