The cloud is a huge convenience and benefit for many. For small applications, renting a cloud shared server is insanely cheap compared to hosting your own. This argument also extends to SAAS services (databases, email, etc). Does it make sense to host my own database, or have someone else do it? For small workloads, it often is much cheaper to put everything (database, webserver, application, etc) on a single cloud server. There is no one size fits all – it’s great to have so many options!
The irony of Basecamp/37signals getting off the cloud is that they offer cloud services to others as their business model 
I agree with you that at various sizes, workloads, and scale, the cloud can be very cost effective. But then at other sizes, workloads, and scale it becomes very not cost effective. Overall I’m very glad we have the public cloud offerings in the market today, it’s another choice available to people and I think that’s good.
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It seems that David realizes this to some degree:
I dream of being able to both buy and sell finished business software products.
Then next article in this Saga:
Again, the cloud brings tremendous value – especially to users who are small or have a highly dynamic load. But, if your load is fairly constant, and you have decent scale, it may pay to run the numbers …
Well said!
A podcast version of this:
A number of points are discussed. In summary:
- for mid-sized companies with stable loads, running your own infrastructure can save considerable amounts
- having a few large companies run most of the Internet runs counter to the original decentralized vision of the Internet
- we get conditioned to the mainstream thinking – it’s much “safer” in the hosted cloud, but you still need to know what you are doing, and there are plenty of companies that suffer security problems in the cloud
- it is hard to get support from large cloud companies versus a small organization that is more matched to your size.
All of these points resonate with me. Again, the cloud is a great resource for some situations, but it is not the best for every situation. I have also learned that phone support can be critically important – for instance if you get locked out of your account and for some reason email is not working – does not happen very often, but when it does … For this reason, I still use Linode for small-scale critical servers.