But then you are probably getting close in pricing to running the stack on AWS, as you don't need to have that much reserved infrastructure when you can easily replace it when there are problems with the server
If you have the requirements for more than a few VM's on AWS, then the pricing for physical is going to be cheaper by far, even with a three-stack of physical servers. Let's put a basic Poweredge R620 as an example. For about $10k/server (and I'm going for buying hardware to kind of do a worst-case-scenario), you can get 384GB of memory per server, times three that's over 1T of memory in your cluster.
Given the EC2 Small instance type of 1.7GB/VM that would be over 600 VM's you could run on that kind of stack. Pricing for a half cabinet with power and bandwidth (you can find places with un-metered gigabit connectivity) will run you no more than about $2500/month (Much less if you are good at negotiating). So you have an outlay of around $40k for total hardware costs and recurring monthly of $2500/month. Amortizing this over expected lifespan of three years for the servers (worst case scenario), you can estimate per month costs somewhere in the range of $3600/month.
With EC2 to reach parity with those 600 'Small' instances would be an initial deposit of $57,600 (for three year term) and a recurring monthly of $11,826 for a total 'recurring' of $13,426/month.
Now, I should point out that these are obviously not apples-to-apples if you have: Huge CPU requirements on those 600 instances, or need lots of disk. Your up-front hardware costs increase (perhaps substantially) once those come into play. More I'm just trying to compare a bare instance scenario. As per one of my comments elsewhere in the thread really it all comes down to workloads and doing a real business analysis.
