Until a few years ago each CPU generation brought so much performance improvement that you would actually save money by replacing the server, because it would cut down your operational expenses (power, rack space, cooling, ...) per unit of compute. This is not so true anymore.
Cloud really does make most computing power fungible.
This replacement schedule is what's creating the fungibility of the cloud.
3 years used to be the industry standard. Electricity costs are way larger than the cost of replacing servers