It’s fun to start thinking about building your own server and putting in a rack, but there’s always a lot of tortured math to compare it to completely different cloud hosted solutions.
One of the great things about cloud instances is that I can scale them up or down with the load without being locked into some hardware I purchased. For products I’ve worked on that have activity curves that follow day-night cycles or spike on holidays, this has been amazing. In some cases we could auto scale down at night and then auto scale back up during the day. As the user base grows we can easily switch to larger instances. We can also geographically distribute servers and provide lower latency.
There is a long list of benefits that are omitted when people make arguments based solely on monthly cost numbers. If we’re going to talk about long term dedicated server contracts we should at least price against similar options from companies like Hetzner.