Bare metal, doubling the amount of RAM and using a more powerful CPU is cheaper than adding a whole server that needs space, network, its own Motherboard, case,

Bare metal, doubling the amount of RAM and using a more powerful CPU is cheaper than adding a whole server that needs space, network, its own Motherboard, case, power supplies etc. This makes vertical scaling much more cost effective (up to a point, which is currently at about 2TB RAM). At AWS's data center AWS also buys big servers. But their advantage is that they only have big servers, and then rent it out in pieces. They don't care whether they rent you 2 48 core 96GB instances or one 96 core 192GB instances. Both options run as VMs on much larger servers and take the same resources, so both are priced the same (a machine of the same category with twice the resources costs exactly twice as much). Thus there's a much smaller benefit to vertical scaling. If you compare actual prices on large-ish instance types between AWS and regular dedicated servers (rented in a DC, not doing your own thing) then AWS is very expensive. And the hopes of paying less due to better utilization somehow never pan out. AWS has lots of advantages, but price isn't one of them; and their price structure will influence the architecture you choose.