Actually there is absolutely no need to wait till you are running $10K cloud bill to buy your own hardware. There are plenty of real cheap second-hand boxes you

Actually there is absolutely no need to wait till you are running $10K cloud bill to buy your own hardware. There are plenty of real cheap second-hand boxes you can buy from equipment recycling companies. The real killer with the cloud is bandwidth and storage. With my colo deal I am paying about 5-10% of what bandwidth would cost at Amazon. Not to mention I can put any kind of storage I like with the actual cost per Gb to buy outright being equal to monthly cost on EC2. Go figure! Cloud has its place to handle spikes of demand, but it is really not cost effective to scale.