"(EC2 is basically a really complicated way of charging for electricity.)"<p>That's the takeaway.  I do agree with this basic premise though. That said, it's not just charging for electricity, but electricity + profit for them.  I do think it's possible to run your own operations cheaper than outsourcing.  I think a lot of pure "cloud" solutions are just smoke on top of some jacked up pricing.  A lot of people are billing by weird bandwith+server+cpu+disk metrics that are hard to evaluate.  If it's hard to figure out, your probably getting worked.  Unless they're really adding something useful at an operational level, do it yourself.  Hardware is relatively cheap.  Guys who can build and configure hardware are reasonably available.  Having total control over all that gives you some flexibility and that's where you add your "special sauce".