Why not hire a devops guy & rack your own hardware? Or get some massive computing units at amazon (just as good but more expensive)?
This reminds me of the excellent 5 stages of hosting story shared on here from a while back:
This reminds me of the excellent 5 stages of hosting story shared on here from a while back:
They should go dedicated for now, it's too early to colo IMO.
That amount buys a whole lotta dedicated servers and the talent to run them. (Sidenote: Every time I price AWS or one of its competitors for a reasonably busy site, my eyes seem to pop out at the cost when compared to dedicated hardware and the corresponding sysadmin salary.)
The larger issue is: Invest in your own sysadmin skills, it'll pay off in spades, especially when your back's up against the wall and you figure out that the vendor-which-solves-all-your-problems won't.
1. Employees are expensive. A good ops guy who believes in your cause and wants to work at an early stage startup can be had for $100k. (Maybe NYC is much cheaper than the bay area, but I'll use bay area numbers for now because it's what I know). That's base. Now add benefits, payroll taxes, 401k match, and the cost of his options. So what... $133k?. That's one guy who can then never go on vacation or get hit by the proverbial bus. Now buy/lease your web cluster, database cluster, worker(s), load balancers, dev and staging environments, etc. Spend engineering time building out Cap and Chef/Puppet scripts and myriad other sysops tools. (You'd need some of that on AWS for sure, but less on Heroku which is certainly much much more expensive than AWS)
2. When you price-out these AWS systems are you using the retail rates or are you factoring in the generous discount larger customers are getting from Amazon? You realize large savings first by going for reserved instances and spot pricing and stack on top of that a hefty discount you negotiate with your Amazon account rep.
3. I've worked at 2 successful, talent Bay Area startups in the last few years: One that was built entirely on AWS, and now, currently, one that owns all of their own hardware. Here's what I think: It's a wash. There isn't a huge difference in cost. You should go with whatever your natural talents lead you towards. You have a founding team with solid devops experience? Great, start on the cloud and then transition early to your own hardware. If not, focus on where your value-add is and outsource the ops.