That said, a small ops team (three people) can manage thousands of machines without much difficulty, and you can probably share two of those with the dev team as Dev-Ops guys, with one grizzled old sysadmin to handle the nastier problems.
I think that a lot of companies shy away from buying hardware for two reasons. One, because they haven't sat down and looked at the long-term ROI, and two, because for the past five years or so, every piece of IT media has talked about how stupid buying hardware is, and how we're all just going to go live in the cloud.
Sounds quite a bit like the NoSQL rhetoric, actually.
The reality is that at a certain scale, it's cheaper from a strategic and/or monetary standpoint to have in-house hardware.
Don't get me wrong -- there's definitely a big home in the ecosystem for cloud hosting. Probably less than ten percent of businesses need to buy their own hardware. But the ones that do, need dedicated hardware in a bad way.