Does it make sense for FAANG to run their own datacenters? Yes of course. Does it make sense for you? No. This is what I don't get about arguments for running a bunch of VPSs-- for literally any environment that isn't thousands of engineers, it is more cost effective to let someone manage your underlying infrastructure for you, and any workload at that scale, you aren't contracting with some random bare metal hosting shop.
I believe he is comparing aws bills vs. engineer time+other hosting bills.
This is how we actually end up having centralized services. The larger companies who have all this infrastructure, and have the size to justify building their own.. well they inevitably ask themselves "Hey! we have all this infra, we have to pay these people anyways, why aren't we selling excess capacity?"
Then you get AWS. Then as time progresses people at even large institutions that could benefit from running their own infra just go and use another company's infra. Where the other company has evolved into being an infra provider instead of a car parts store, book store(amazon), or search engine.
To answer your question directly. Yes I think this can be done within one engineer salary even if I'm including my own salary. There would be a startup cost that eats into that salary in year 1. But it would be manageable. And then iterative upgrades/replacement parts would be a negligible cost ongoing after year 1. With some financial tricks that startup cost can be spread out over a long enough period that it wouldn't even impact year 1.
And we're approaching that because as these types of skills are outsourced to these institutions the amount of people with the skills necessary to carry them out are diminished in number from attrition. Amazon doesn't need 10 company's worth of engineers to have the requisite skills. If everyone buys into this model then eventually the market will only bear the number of engineers having that knowledge as Amazon needs.
You'd be spending more than 1/2 your time just on the phone talking to people.
If we want to talk about running a CDN company in terms of lots of additional organizational complexity in terms of customer service it can't be done on a single engineer's salary. My perception of a homegrown CDN is one that rivals uptime and deliverability metrics of existing commercial CDN providers. Within an existing org it can be done. If we're talking outside of an existing org think http://www.nosupportlinuxhosting.com/ to shave costs.
If we're willing to define parameters on what level of service this CDN needs to meet and ramp up time I'd be willing to take it on.
This is my point-- I am not in the hosting business. I am in the application creation business. Every minute that I even have to think about modifying /etc/localtime in order to make sure that the instance is running in UTC is a minute I'm not being productive. Multiply that by those million little things that you have to do in order to keep even an ec2 instance running, and it's such a colossal waste of time and effort. Similarly, I am not in the database tuning business. I plan out my data relationships, create the required Dynamo table or tables, and I never need to worry about replication or backups or any of those ancillary tasks that keep me from being productive.
I'm not a woodworker, machinist, farmer, or doing a PhD in literature. Nevertheless, I engage in all of these things. I enjoy crafting things and learning new techniques. I enjoy learning how to optimize plant growth. I enjoy reading old literature and gathering what I can from it about the historical context, linguistics, etc. All of these types of things, while not "productive" give me additional knowledge that I can pull from in "unrelated" tasks.
In the tech world, I'd say that realistically all abstractions are leaky. So engaging in these tasks(you mentioned) are productive. But even more than that because abstractions are leaky this is knowledge that is useful. If you don't have the knowledge of the systems underlying the abstractions you're using it's a footgun waiting to happen.
I can give an example. I had a boss that was doing some serverless work and he made an assumption about JSON. I told him in review that JSON does not respect ordering of keys. Well, he assumed it would not be a problem. It was pushed to production anyways. And a few weeks later it came back to bite him.
Now what happens when you don't dig into your abstractions? You lack the knowledge to fix problems that happen at a lower level. When you're deploying these "relationships" to your database provider. What happens when the machinery breaks down for replication, backups, etc? You have to sit around and wait for an expert to fix your app. Meanwhile you're staring at your users and stonewalling.
No, you're not in the hosting business, you're not in the database tuning business, you're not in the sysadmin business, and you're not in the Ecmascript working group. Until you are. Then when you're foisted into this role you're a fish out of water. Specialization is for ants, but we're humans, not ants.
Have fun with an army of one-trick pony hires. One old-school diehard computer nerd knows enough to supplant 10 of those fools, but only costs 2x.
About staff, maybe consider finding a good consulting/support firm that can look after your servers for <10% the price of hiring one person, are friendly and on-call, and will likely stick around even as their people change.
That solves the worry about replacing people, as well as the cost.
But as with people, it can take some luck to find a good one :-)
(I used to provide that kind of consulting/support service. Not as much now because there isn't much demand, and development & research work is more satisfying. But still a little, ticking along in the background.)