In 2013, My business partner, Mark Stavrou and I built and exited our company that was focused on realizing the promise of the cloud. Compared to the costs of hardware, network, and talent, it was excellent value and time saver.
The pendulum of infrastructure strategy is swinging back to physical hardware, and for good reasons. Let’s explore how dramatic changes in infrastructure costs over the past decade have reshaped the economics of platform delivery.
The Cloud’s Perfect Storm (2013)
In 2013, building your own infrastructure was prohibitively expensive:
- Bandwidth costs: $1.57 per Mbps
- Enterprise switches: $20,000-30,000 per unit
- Server costs: $15,000-20,000 per unit
- High operational overhead for maintenance
The cloud provided an attractive alternative with its pay-as-you-go model and minimal upfront investment.
The 2025 Infrastructure Renaissance
Fast forward to 2025, and the landscape has transformed dramatically:
- Bandwidth costs: Mere cents per Gbps
- Enterprise switches: $6,000-8,000 for comparable units
- Server costs: $5,000-10,000 for high-performance units
- Automated management tools reducing operational costs
Why Bare Metal Makes Sense Now
The economics have shifted decisively in favor of bare metal infrastructure:
- Performance: 150% faster than virtualized environments
- Cost Efficiency: 40-60% lower TCO compared to cloud for steady workloads
- Control: Direct hardware access for optimization
- Security: Physical isolation and complete control
Real-world Cost Comparison
Let’s break down a typical deployment:
2013 Infrastructure (100 servers):
- Hardware: $1.5M-2M
- Bandwidth: $157,000/month per 100Gbps
- Total First Year: ~$3.5M
2025 Infrastructure (100 servers):
- Hardware: $500K-1M
- Bandwidth: $5,000/month per 100Gbps
- Total First Year: ~$1M
The Future of Infrastructure
By 2025, 40% of newly procured premises-based computing and storage will be consumed as a service, indicating a hybrid future where organizations leverage both bare metal and cloud services strategically.
For performance-critical applications, the choice is becoming clear: physical infrastructure delivers superior performance at a fraction of the cloud’s cost. The key is understanding your workload patterns and making informed decisions about infrastructure investment.
Remember: The cloud isn’t disappearing – it’s finding its proper place in a balanced infrastructure strategy where bare metal serves as the foundation for predictable, high-performance workloads.
Conclusion
The cloud isn’t going away as a modern platform uses cloud AND some sort of physical infrastructure be it Bare Metal, on-premises, or colocation. We’re finding a lot of success in the market by working with customers who want to rationalize today’s spending in 2025 to make sure they are optimized for cost, performance, and resilience. Data sovereignty, control for compliance, and the rise of AI have pushed companies into a hybrid model to account for this major change in technology.
