I guess in my particular case I don't need a dual E5-2620 v3 w/64GB of RAM.
The only way I could see needing that for our product is if we were virtualizing our own infrastructure.
But, AWS is not a 1 size fits all case. In that case, AWS probably doesn't make sense.
Side notes: you also need to consider the electricity, setup time, cost of hardware failure, networking access, rack space, etc. The hardware itself is not the most expensive part.
Side note two: where are you getting those prices? I've seen just the motherboard and 1u case cost close to that much. I'm assuming those are workstation prices not rack mount... but if they are rack mount please give me your supplier :)
Pick a smaller ec2 instance, and I'll find a comparable dedicated server that yields a similar price/perf gain (true, it might be more pronounced on the high end...).
Your two side notes tell me that you're conflating dedicated and colocated hosting. I can see now why you think EC2 saves you devops if you think colocated is your only choice.
I'm talking about dedicated hosting, so, no, I don't need to worry about electricity, setup time (not as much as you mean anyways), hardware failure, network access or rackspace. This is an extremely common model.
The price that I quoted I just got quickly from Hivelocity.com (1). The price is actually $300, not $400...I'm not affiliated with them at all. They've been in business for longer than AWS has existed. I could have gotten a similar price from a thousand companies.
The only way I could see needing that for our product is if we were virtualizing our own infrastructure.
But, AWS is not a 1 size fits all case. In that case, AWS probably doesn't make sense.
Side notes: you also need to consider the electricity, setup time, cost of hardware failure, networking access, rack space, etc. The hardware itself is not the most expensive part.
Side note two: where are you getting those prices? I've seen just the motherboard and 1u case cost close to that much. I'm assuming those are workstation prices not rack mount... but if they are rack mount please give me your supplier :)