I was talking about at scale, not a rack. If you can get by with a rack, you will pay more for the people to support it than the incremental cost of the cloud.
> If you can get by with a rack, you will pay more for the people to support it than the incremental cost of the cloud.
Probably a whole lot less.
At larger scale - I would guess it's the same thing. If an organization needs more than a rack during peak use, it can probably benefit from setting up its own infrastructure. Only in the uncommon case of short extreme peak use and almost no use most of the time does such elasticity make a could solution attractive. IMHO.
About the up-front investment - most hi-tech companies are a massive initial up-front (or nearly-up-front) investment.