Meanwhile the company I just left was spending more than this for dozens of kubernetes clusters on AWS before signing a single customer. Sometimes I wonder what I'm still doing in this industry.
Yup.
Cloud is 21st century Nickel & Diming.
Sure it sounds cheap, everything is priced in small sounding cents per unit.
But then it very quickly becomes a compounding vicious circle ... a dozen different cloud tools, each charged at cents per unit, those units often being measured in increments of hours....next thing you know is your cloud bill has as many zeros on the end of it as the number of cloud services you are using. ;-)
And that's before we start talking about the data egress costs.
With colo you can start off with two 1/4 rack spaces at two different sites for resilience. You can get quite a lot of bang for your buck in a 1/4 rack with today's kit.
Until very recently, while money was still very cheap, the time overhead it would take to manage this just was not worth the cost savings.
Even with the market falling out from under VC, I think it still is a good tradeoff for many shops.
You can also rent a whole server. There's not much difference in time in managing a VM in a cloud or a whole server you rent from someone. Depending on the vendor, maybe some more setup time, since low end hosts don't usually have great setup workflows, so maybe you need to fiddle with the ipmi console once or twice to get it started, but if you go with a higher tier provider, you can fully automate everything if that floats your boat. It's just bare metal rather than a VM, and typically much lower cost for sustained usage (if you're really scaling up signfigantly and down throughout the day, cloud costs can work out less, although some vendors offer bare metal by the hour, too)
In one afternoon (at most), I could have written a script to deploy our demo with docker compose over ssh. Sure, docker compose won't scale forever, but their runway didn't last forever either.
You can get up to $100k and it's a big reason many startups go in that direction.
Also $20k is nothing when you factor in developer time etc.