The advantage of a lot of these is that you don't need any of that. You can have just a dev team, nothing else, and be up and running at any scale. At that point cost comparisons may come out in favor of a cloud solution (or at any rate are so close that the tradeoffs become acceptable, hence their popularity)
Has anyone done this in practice at significant scale? Every shop I know of with a big cloud deployment has armies of devops people managing the deployment, and further reserve armies on pager-duty standby in case something blows up. They're certainly doing different things than if you had an in-house datacenter (less hardware maintenance, more cloud orchestration), but I'm not convinced the sysadmin/devops headcount has actually gone down.
TwitPic relied on it and operated as basically a one or few person shop the entire time. At the peak, before Twitter came up with their own solution, it was a relatively large service.
Instagram, Imgur, and Reddit all had/have (Instagram of course moved to FB) small teams operating at vast scale with the help of AWS.
Slack has probably benefited a lot from leaning on AWS for scaling purposes, given their rapid growth. I'd place a bet that they have managed to achieve their scale with a relatively small team managing their infrastructure.
Also Twitpic didn't reduce their sysops, they simply kept it low, AWS didn't do that, a server which serves much more complex stuff and many more people than twitpic can be run by one person, see stackoverflow.
There are a lot of people out there who don't realize what can be done with one or two dedicated servers and one or a handful of good developers without ever mucking around with cloud. Cloud can just add yet another point of failure to a small business if it wasn't worth it in the first place.
Sure, its not 5 9's, but its a far cry from "notoriously bad at staying up"
If you're using an automatic container scaling solution, such as AWS' Elastic Beanstalk, you can still benefit from devops, but I'd argue you don't need it; all the difficulty resides in structuring your application to be able to handle that environment, a problem for your software devs. The devops burden is low, and the time to communicate what a developer needs to the devops is likely going to trump the time taken for the developer to just do it.
If you're looking to use a containerless solution using cloud resources (like AWS' Lambda, API Gateway, and Dynamo to create a CRUD app), you don't need devops. All your difficulty resides in reducing and/or handling state between functions (well, and any other shortcomings in the actual implementation of the service); again, a software problem.
Basically, Amazon, at least (what I have the most experience with) seems to be looking to remove the need for devops by creating standard workflows and mechanisms to bind services together with arbitrary code, and to be able to inherently scale out. The remaining devops burden is sufficiently small, and so tightly integrated with the nature of the software involved, that it's oftentimes more effective to just have the devs handle it. While sufficient amounts of code might turn that into a devops role, what I meant by scaling out is a particular app handling a given amount of load. In a classical datacenter environment, moving from an app on one box to an app that spans many is something both the software devs and devops have to concern themselves with, but in the cloud it's mostly just a dev consideration; if the app is written to handle multiple copies of itself, spinning up those extra copies should be close to if not actually trivial. That was all that I was saying; the move from one to many doesn't require devops any longer, as "how do I make sure all of these boxes are set up properly, get deployed onto, are kept in sync, load is shared between them, etc" are problems that cloud providers have provided tools to solve, and what they leave out doesn't require dedicated devops to address.
There's over 400 million Snapchats sent per day. I'd say that's pretty big scale, all done in the cloud.
Now you're talking about DevOps, which is short for Development Operations, which is a developer role, not an IT role. DevOps people automate your buildchain and that kind of stuff. No one is saying that using cloud services means you don't need DevOps, though there are some cloud services that will handle at least part of what is traditionally in the realm of DevOps for you.
Cloud computing means the entire DC is programmable, and I use it as such.
Moreover the unprecedented level of automation means I can spend a lot more time on creating customer value rather than faffing around with admin. The shift I've seen in the last three decades* has been phenomenal. Teams aren't smaller but they are vastly more productive.
* yes I have been in tech that long :~
In 100% of my experience to date, "cloud lock-in" is a myth trotted out by server huggers and hardware salesmen. Some SaaS providers may be data prisons, sure, but that's a different conversation.
If the economics of establishing and operating off-cloud resources ever made sense for us, we'd go for it, but it looks increasingly unlikely.
Edit: I should note that we do, where appropriate use 'cloud' services including Rackspace, AWS and Azure where appropriate. Azure has had significant performance issues and has a lot of provable downtime especially due to internal network routing and DNS problems that they fail to acknowledge and we've found their support to be a joke if you know what you need / are doing, even their own O365 service has weekly outages that can take several minutes to resolve. Rackspace's support has been good but they do have a lot of small outages again often network related. AWS' has been alright be very costly unless you're doing either very small deployments or at the other end of the scale massive, horizontally scalable deployments, however their storage performance is woeful. For our mission critical or high performance deployments using our internally hosted platform is significantly fast and almost always cheaper. Our uptime across the platform is fantastic and it generally 'just works' while we watch our cloud hosted services suffer from inconsistent performance and service 'blips'.
(I'm genuinely curious but I feel like there's a missing upfront cost that's not being included here)
Anyone that says moving to the
cloud saves you money is likely
wrong.
What kind of storage are we talking here? Even 1TB server SSDs don't cost nearly that much.