We reduced our server costs by moving away from AWS

The whole idea that since they have economies of scale, they must pass those savings on to you is a misunderstanding of how companies work.

Realistically, a company will charge slightly less than whatever your alternative is, and they will provide products that restrict the number of alternatives you have.

AWS, GCP, and Azure provide several differentiated products that lock you in to higher prices on everything else. Effectively, these three have an oligopoly on "highly differentiated cloud services." They are only competing with each other on those services, and they are competing with "servers plus ingress/egress costs to our differentiated services" on their commodity products. That is the real reason why AWS egress costs are so high. It prevents you from picking and choosing where to buy each part of your cloud footprint, and locks you into buying AWS. Bandwidth costs are what keep you inside the AWS/GCP/Azure walled garden.

Lower-end providers like Linode, DigitalOcean, Vultr, and Cloudflare have parts of the differentiated offering, but not all of it. These people will have lower prices than AWS/GCP/Azure since their offering is less differentiated, but they will still charge you more than you would pay by renting a server, since they offer more products.

Finally, hardware rental providers like Hetzner and other operators are competing directly with you buying the hardware and paying for datacenter space and bandwidth. Datacenters typically charge a premium for power, even when they are in areas with low-cost power.

Notice that none of these companies are competing with large-scale server buyers who have the same hardware/bandwidth/power costs that they do. As such, they do not need to pass the savings they get onto you. That is where they get their profit.

I believe this is the use case Cloudflare is really targeting with R2. They recently connected Cache Reserve to R2 to make this even easier. We wrote up a breakdown for S3 vs R2 and found that R2 would be significantly cheaper when the majority of traffic is cached data, https://www.vantage.sh/blog/cloudflare-r2-aws-s3-comparison

> The whole idea that since they have economies of scale, they must pass those savings on to you is a misunderstanding of how companies work.

That idea was not expressed in the comment that you replied to. The comment you replied to was in response to a strong claim that ignored the existence of economies of scale, and therefore concluded that it's so obvious that cloud providers must always be more expensive than self-hosting.

They don't mention at all what services they were using (other than slight mention of S3) which makes it very hard to respond to this. If you are running everything on EC2 then you are going to have a bad time (especially if you aren't using reserved instances).

AWS (IMHO) shines with the various services they provide (S3, Lambda, CloudFront, API Gateway, SQS< SES, to name a few). AWS is a game of trying to reduce your bill and often that means using AWS-specific services. If you want to stay completely "cloud agnostic" you are going to paying more than buying into a "cloud", in that scenario then you absolutely should be looking at dedicated servers. AWS is great because you can bring existing software and just run it in EC2 (or their container stuff if your software is containerized) but the AWS magic comes from using their managed services (also spinning up/down EC2 instances as needed, but if you are running them 24/7 then consider alternatives or at least pay for reserved).

Not to mention having your own datacenter, which is even cheaper (unless you do something stupid).

EDIT: to the naysayers: I worked in various companies (from tiny to huge) maintaining their own DCs and had access to financial data. And I was involved in the setting up new DCs.