I would have argued against you a couple of years ago, because I've also built stuff this way and it required a developer or two to care at least a little bit about database administration, and few of the one's I've met do.

However, these days, I notice my DBA skills atrophying because LLMs have encoded most of the answers and diagnostics I need in their weights. Coupled with something like Nix, spinning up new servers including backups and everything, it's easier easier than ever to run your own production database instance.

It's all good while it works.

The day it broke, it's a PITA.

You need that RAID card which is not available anywhere around you.

You need to visit your Data Center, but you suddenly have issues with security and you need to arrange all that stuff.

You need to buy DDR stick but you need to wait a month for delivery.

The guy who knows how to insert a stick took a vacation week ago, and everyone else is too afraid to touch big iron box.

With cloud, you either don't notice that, because they have scale and they have spare parts and they have personnel 24/7. Or worst case you order identical server and deploy your app, hopefully in a few hours restoring from backup.

And for some people it might never broke. But it's all the uncertainty and fear that leads people to cloud solutions. You don't plan for average outcome, you plan for worst outcome.

if you do the same type of governance, cloud is still cheap too (everything on one server)

Where the money gets wasted, is doing a different server per project, putting everything in different resource groups, and then overprovisioning those servers many times over. So much wasted capacity because of simple project structure preferences.

And then there is also the fact some features are locked behind more expensive models, which is also rarely cost efficient.

All I am saying is, if you simply create 1 database server on the cloud, with a database per app, and different schema's, isolated users, ... it can stay super cheap. But good look getting through an enterprise cybersecurity audit or ISO27000+SOC2 certification.

I built my own server for home last year, all consumer hardware (AMD Ryzen, 96GiB RAM, NVME SSD, HDDs etc). Total cost was ~£3,000 at the time - £6000 up front cost for a business seems reasonable; and you could get away with less.

However, the main cost would be colocation - it's risen quite a bit.

Single boxes now are also insanely powerful compared to what we had back in the day too. Unless you are genuinely running the next Google, you might not even need to scale beyond one. As you said you might get a second box purely as a hot spare.

I remember we ran a pretty large UK website on 5 x Pentium II boxes, using a Perl stack which is not exactly memory efficient. Later we ran a chat server for hundreds of thousands of school kids on a single server which was (if I remember this right) a Pentium III with 128 MB (yes, megabytes) of memory and a spinning hard disk.