Your math is off. At $13.338/hour you're looking at just shy of 10 grand per month ($9763 for a month of 30.5 days.) It looks like one of these bad boys would

Your math is off. At $13.338/hour you're looking at just shy of 10 grand per month ($9763 for a month of 30.5 days.) It looks like one of these bad boys would set you back about $40000. So you'd break even at 4 months. If you're going to go for the 3 year reserved instance, with $100K upfront, you'd be way better off on capex and opex just buying and colocating the thing (not considering other expenses.) The bigger you grow the more the balance tips towards do it yourself because your costs for colocation, managing hardware, etc amortize out better with scale. AWS gets a little better with scale but not nearly as quickly.