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I guess it depends, but infra is also a lot simpler when starting out. It really isnt much harder (easier even?) to setup services on a box or two than managing AWS.

Im pretty sure a box like this could run our whole startup, hosting PG, k8s, our backend apis, etc, would be way easier to setup, and not cost 2 devops and $40,000 a month to do it.

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Is infra really that hard to set up? It seems like infra is something a infra expert could establish to get the infra going and then your infra would be set up and you would always have infra.
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You are correct but it still takes time. You can start using cloud today but you need to:

* sign the papers for server colo * get quote and order servers (which might take few weeks to deliver!), near always a pair of switches * set them up, install OSes, set up basic services inside the network (DNS, often netboot/DHCP if you want to have install over network, and often few others like image repository, monitoring etc.)

It's "we have product and cashflow, let's give someone a task to do it" thing, not "we're a startup ,barely have PoC" thing

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As a big on-prem guy, I think cloud makes sense for early startups. Lead time on servers and networking setup can be significant, and if you don't know how much you need yet you will either be resource starved or burn all your cash on unneeded capacity.

On-prem wins for a stable organization every time though.

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You can rent a vps or dedicated server if you need something immediately to without going to cloud providers.
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Secure and reliable infrastructure is hard to set and keep secure and reliable over time.
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You have to pay that infra person and shield them from "infra works, why are we paying so much for IT staff" layoffs. Then you have ongoing maintenance costs like UPS battery replacement and redundant internet connections, on top of the usual hardware attrition.

It's unfortunately not so cut and dry

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Based on the evidence, not only is infrastructure really hard to set up in the first place, it is incredibly error-prone to adjust to new demand.
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