Either way, it's definitely not the cost difference between on-premise and cloud. Cloud providers are not charities, and their buildings and staff are not cheaper than yours.
Getting computers from the cloud companies is very different: most cloud products (aside from server rentals) are not in competitive markets.
Fast delivery couriers do not ship by sea.
It looks to me like the cloud providers will soon have FedEx nicely tied over a barrel, and those 'savings' will prove illusory .
Exactly, which is why it’s quite a bit cheaper to not have a building and staff right? The premium you pay for the cloud provider having them must be less than having them yourself, or nobody would ever move to a cloud provider.
In order for the cloud business to make sense, turn a profit and sponsor the kind of development into new products done by these companies, we can assume that the cloud services sold by these providers must have a very healthy margin compared to the cost of operating a datacenter full of resources.
The primary thing a cloud business can do to drive cost back down past what you could do with your own datacenter is to have better utilization of their resources by dealing with an average across a much wider range of workloads, or by selling spot instances that get killed if capacity is needed, but based on how things are priced it appears that this mainly just pads their margins.
For the customer, it only really ends up cheaper than on-premise is if: A) you need very few resources and do not already have anywhere to put a server or lack a good uplink; B) your use-case is extremely well-optimized for cloud (e.g. extremely bursty serverless where you average load is a tiny fraction of a single machine); or C) you are Netflix and can make a deal with AWS.