420k a year is the total for the organization. It includes salaries, administration, etc.
Cost breakdown: https://docs.google.com/spreadsheets/d/1Si3PMUJGR9KrpE5lngSk...
In my experience, whenever someone actually had to "foot the bill" for the AWS premium, your argument that the cloud is cheaper overall came under a very heavy scrutiny, including justifying those extra "9s" that increase administration effort.
So administration costs aren't zero today, but I suspect they'd be higher if they moved off the cloud.
When EC2 goes down, I need to maybe wake up and log in to see what happened. I see that all of us-east-1 is down (again), notify everyone involved: "It's down can't do anything, it'll come back up when AWS engineers get to it" and go back to bed.
I can check up on it again during office hours.
If this was a colocated server, I'd need to drag my ass out of bed and drive to the site to see what's up.
AWS is really expensive if you have the skills to managed hardware yourself.
If YOUR server(s) go down for whatever reason, you're getting up at 3am and driving to the data centre to put the fire out assuming you know how to troubleshoot the issue (lets face it, most Devs probably don't since its not their specialty), and have the means of fixing it (failed RAID card? Hope you've got a spare). Then theres the headache of when the data centre is on the other side of the world - get ready to cough up hundreds of dollars to wake up remote hands, and try to get them to do the work for you (probably pretty poorly).
If AWS goes down at 3am, you simply roll over, go back to sleep and have another look when you wake up.
Of course this does all depend on the software, cloud infra being built sensibly but the same also applies for "on-prem" solutions as well.
Pretty much any outsourcing shop you hire will be able to do basic Ansible and monitoring and DBA tasks.
Or, maybe start. Would at least be worth looking at to see if [the equivalents of] spot or reserved instances, Lambda's, Cloud Run, or other serverless etc. might save some money.
That would save them $179 per year.