When you compare raw hardware costs vs VM costs it seems ludicrous. But it's more reasonable than you expect. First if you commit for 1 or 3 year (like you'd d

When you compare raw hardware costs vs VM costs it seems ludicrous. But it's more reasonable than you expect. First if you commit for 1 or 3 year (like you'd do with hardware) you can get 30-70% discounts already. Then you have to factor in costs of: replacement hardware, energy, cooling, networking. But the big one is people. Someone has to install all that hardware, fix it if it breaks etc. They provide everything like that for you. If you are tiny (<10 servers located in your business building) it can be worthwhile because it's just a side job of someone you need anyway. After that you need quite a large scale for it to become really attractive.