Not on the same scale but in my previous company we observed the same thing (though the other way around since we moved from self-hosted to cloud).
He had a team of 4 managing the infra for an app (82 million users, 30 million DAU) and spent around 500.000€ per year on the data centers + this team's salaries + some other expenses like travels to the datacenters, some new stuff etc..., let's say around 1.000.000€ per year.
At some point upper management decided to move to the cloud and we eneded up in a worse situation: the promise of easier resource management was unfulfilled since the same 4 people was managing now the cloud so no cost reduction on that side and most important, cloud costs were 4-5 times higher than self-hosting
I still wonder why management decided to go that way
I was PM for a cloud hosting solution that we were originally running colocated. We moved it all to AWS for about 5x the costs after you calculated capex vs opex etc.
"The Cloud" allowed our customers to set up their applications with High Availability and PITR (via RDS, building that ourselves at scale would have been problematic). It also allowed us to launch services anywhere in the world. Setting up data centers globally would have been hell.
The product was still easily profitable despite the costs, so I think we made the right move.
We are nearly two decades from the launch of EC2 and I still need to explain to people (technical and not) that the cloud isn’t cheaper once you get to a certain scale. Everyone is always amazed.
Cost is only one aspect and infra should know that moving to the cloud will usually be more expensive than running on colo. I assume there were other aspects that played a role in this decision like elasticity, scalability and high-availability which are easier to go for with a cloud provider.
He had a team of 4 managing the infra for an app (82 million users, 30 million DAU) and spent around 500.000€ per year on the data centers + this team's salaries + some other expenses like travels to the datacenters, some new stuff etc..., let's say around 1.000.000€ per year.
At some point upper management decided to move to the cloud and we eneded up in a worse situation: the promise of easier resource management was unfulfilled since the same 4 people was managing now the cloud so no cost reduction on that side and most important, cloud costs were 4-5 times higher than self-hosting
I still wonder why management decided to go that way