Reason? You need to be in control of your key assets.
For a non-critical website or a web service, I can see AWS taking over for some or all parts.
For something handling financial transactions, or for anything of a high value, no.
Consider a scheduling application for a company with 200 well-paid people. How much would loss of that scheduling application for the 1 hour that it is really needed per day (to set up schedules) cost?
The question that follows is "Why do you need to control your asseets?"
The answer being "So you can ensure they don't go down"
Then the question becomes "can you use cloud computing and be sure your server won't go down?"
The answer "Yes, you just have to have redundancy (the kind you'd get by having a second provider like Rackspace host a redundant fail-safe server)"
So really "control" doesn't matter because thinking the train of thought all the way through leads you right back to the central theme of the article: Cost
If Amazon + some kind of redundancy is still cheaper for your company than cloud computing might be for you.
Why is this any different than water or electricity for which most businesses are satisfied with central providers?
You wildly overblow the need for control and wildly undervalue the amount of control you have over a 3rd party vendor.
> How much would loss of that scheduling application for the 1 hour that it is really needed per day (to set up schedules) cost?
Weigh that against the cost of duplicating what amazon has + staffing + recruitment + retention of staff + building for them and their managers to work in + all the other costs. For a huge number of companies the cost/risk of AWS or the like is gonna be better than cost/risk of doing it themselves.
Financial services are already being handled by contractors for many small businesses. The requirements to legally handle credit card info can be expensive, so small websites just contract it out.
And unless you need some specific networking solution, like if you're running an mmorpg or using the network to trade stocks, outside services will probably meet your needs.
So your IT department running your server is basically an insurance policy against downtime. And once web hosting turns into a commodity, you'll probably be able spend less on insuring against downtime using outside services.. I'm sure you could spread your hosting out between several hosts for less than running your server.
For something handling financial transactions, or for anything of a high value, no.
I think there are a lot of sites out there that not having to administer their own machines is worth the minor loss of control. Sure, there will always be sites that need that control, but for many web apps (etc) out there, I think AWS will be worth the tradeoffs.