Unless you are suggesting that Amazon is getting free electricity, then must be either: - Profiting enough from micro instances to pay for the electricity of r

Unless you are suggesting that Amazon is getting free electricity, then must be either: - Profiting enough from micro instances to pay for the electricity of running them. If so then when you get to using a server full of micro instances you can save money by doing that yourself and not paying Amazon's profit. - Eating the loss and subsidising it from other income. This is convenient for you but not anything to do with the cloud, more to do with the power of a huge company. - Big enough to have arm twisted a fixed price for a long time ahead, pushing the extra cost onto the supplier, so the supplier will go bankrupt and be bailed out by the taxpayer. Again convenient for you but nothing to do with the cloud. - Other? What's your explanation for Amazon not charging customers more despite rising energy costs? You switched "self-hosting" to "colo" which aren't the same things. One can imagine a big non-tech company negotiating fixed prices on their power for their datacenters. One can imagine a big non-tech company investing in regular server refreshes to converge down on more power efficient servers over time.