400k could get you 10 Dell Poweredges with a 128 core CPU, 256GB of RAM and multiple terabytes of storage _multiple times_. 400k easily covers two of these machines, and colocation space is about 2k per year.

Cloud hosting only makes sense at a very, very small scale, or absurdly large ones.

You have two options. Colo if you still want physical access to your devices, or cloud, where you get access to nothing beyond some online portals.

So that they can pay 100x more expenses for.. no gain? They would pay an arm just for traffic.