Using insurance to cover unexpected costs is always a gamble, one way or an other. A business that invest into physical servers could sell of those servers if t

Using insurance to cover unexpected costs is always a gamble, one way or an other. A business that invest into physical servers could sell of those servers if they later find out that there is a recession, which might cost more or less compared to a cloud solution. If a business invest into a cloud infrastructure and create a binding contract for 5 years, only to find out that they actually want to abandon that project a year later, that is also a sunk cost. Long term contracts tend to be cheaper, so its a trade off between saving money vs risk. It all depend on the risk analysis, how risk averse one want to be, and the economics/liquidity needs.