Thanks for all the replies. I am just researching all of this for my own startup and it is important to understand all the tradeoffs. And it is clear from your article that AWS has a very deep feature set. Its a good article!
Look at Reddit, they have very few employees yet they can't make a profit because their hosting costs are massive.
Contrast them with StackExchange, which uses a small number of powerful, well-optimized servers and is very profitable.