I absolutely agree in the long term, but can you say a little about how much those servers cost initially?
I tend to favour dedicated servers which I own over VPS but for small businesses with extremely constrained budgets ("prove we can make money before we invest in hardware") and startups, flexible virtual servers can be a great way to ramp up in the beginning.
About $10,000 per server, equipment (very heavy) was shipped from US so there were import duties but it worked out a little bit cheaper than buying in EU in end, and had other reasons to shop in US.
Anyway its a once off cost, that accountant can do all sorts of magic with this.
Ive been in business for 7 years and hope to remain around for as long.
Have already saved money as to compared to renting dedicated servers before. AWS etc were never an option the sums simply never work out.
AWS might be great at first when you are starting out, but the costs can cripple a business, especially if you dont have others peoples venture capital to burn.
edit: when bandwidth costs are factored in the difference is and order of magnitude between my current setup and amazon, at time of this post using 2200 mbit outgoing, 800 incoming
edit2: my only regrets is not collocating earlier, have spent well into upper 6 figures over all the years :( on renting, AWS etc werent around when was starting off either.
that long term can be pretty quick though... in the UK at least you get 100% tax relief for plant (hardware) expenditure up to a limit (currently half a million a year)
I tend to favour dedicated servers which I own over VPS but for small businesses with extremely constrained budgets ("prove we can make money before we invest in hardware") and startups, flexible virtual servers can be a great way to ramp up in the beginning.