<i>&gt;That&#x27;s not really outsourcing. That&#x27;s shifting from capital expenses to operating expenses</i><p>The &quot;capital (depreciation) vs operating&quot; is only talking about hardware.  Having in-house IT <i>employees</i> to install new servers, run new cabling, change tapes for backups, etc, is not a capital expense.  Migrating to AWS can shift the FTEs from XYZ company&#x27;s payroll to Amazon&#x27;s payroll.  Presumably, Amazon&#x27;s engineers can do IT admin operations in a more cost-efficient manner. That&#x27;s &quot;outsourcing.&quot;<p>Yes, there would still be in-house employees as &quot;AWS admins&quot; but overall, there should be a net-reduction of FTEs doing commodity-IT grunt work.