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throwaway98158

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Can you explain how can physical hardware concerns be handwaved away?

It's not just about the hardware itself, that's the easiest part.

It's about building and maintaining the electrical/cooling/network infrastructure the servers require. It's about having multiple locations of that in case your building's power or network goes down/there's a flood/somebody steals all your stuff/whatever else.

Or you rent a rack in a colo (or five)... But that's just a step away from going full cloud, you just do a lot of work yourself and get no guarantees and no flexibility. At that point, why not just go full cloud?