The Strategic Guide to Migrating from AWS to Bare Metal

For growing companies, the public cloud has long been the default for its promise of easy scaling and no hardware management. But as businesses mature, that flexibility can come at a steep price. Many organizations find they are paying a premium for elasticity they don’t use, renting infrastructure at a markup that erodes their profit margins.

If your AWS bill keeps spiking unexpectedly, this guide to regaining control of your cloud costs can help you triage waste before you migrate.

This isn’t just a feeling, it’s a verified trend. We are seeing a structural shift where data-intensive organizations like Ahrefs, 37signals, and Dropbox are repatriating workloads to bare metal environments. They aren’t doing it for nostalgia; they are doing it because, for steady-state workloads, the public cloud has transitioned from an enabler of agility to a mechanism of margin compression.

If you are evaluating whether to break free from the hyperscale ecosystem, here is how to plan a migration that prioritizes profitability, performance, and control.

Understanding the “Cloud Tax”

The primary economic driver for moving to bare metal is eliminating the discrepancy between the cost of raw compute resources and the price of managed cloud services. This gap is often referred to as the “Cloud Tax.”

Public cloud providers typically operate with gross margins estimated between 30% and 60%. You are paying for the virtualization layer, the management APIs, and the convenience of on-demand provisioning. While valuable for early-stage startups, this premium becomes hard to justify for mature businesses with predictable traffic. When you strip away the virtualization overhead and rent the hardware directly, the cost basis drops significantly.

For a deeper, numbers-driven comparison, see our analysis on cloud vs. dedicated server TCO in 2026.

The Performance Reality: Bare Metal vs. EC2

Cost isn’t the only factor; there is a massive performance differential. In a virtualized public cloud environment, you share physical resources with other tenants. The “noisy neighbor” effect can degrade performance, and the hypervisor itself consumes CPU cycles.

On bare metal, you access 100% of the system’s resources. Consider a high-performance specification like a Dell R7625 equipped with dual AMD EPYC processors and 2TB of RAM. In raw compute power, a machine of this caliber can outperform its EC2 equivalent by a factor of 3x to 10x per dollar spent. You aren’t just saving money; you are getting significantly more horsepower for every dollar you invest.

If you’re running containerized workloads, here’s why skipping the hypervisor with Kubernetes on bare metal amplifies those gains.

Success Stories: The Economics of Repatriation

The industry is full of case studies proving the viability of this model. Here are three standout examples:

Ahrefs: Saving $400 Million with Colocation Infrastructure

Ahrefs, the popular SEO platform, operates its infrastructure through colocation in Singapore. Their internal analysis revealed that running their workload on AWS for 2.5 years would have cost around $448 million. By using their own hardware instead, they managed to lower their actual costs to approximately $40 million. That staggering $400 million difference is what keeps Ahrefs profitable, demonstrating the power of owning and managing infrastructure.

37signals: Cutting Cloud Costs by Millions

The creators of Basecamp and HEY, 37signals, made headlines by significantly reducing their cloud expenses. By moving away from the cloud, they projected savings of roughly $10 million over five years. Their annual cloud spend dropped from $3.2 million to $1.3 million, proving that even mid-sized tech companies can achieve massive financial returns by managing their own infrastructure.

Dropbox: Saving $75 Million with Custom Infrastructure

One of the most well-known examples is Dropbox, which transitioned from AWS to its own custom infrastructure. This move resulted in an estimated $75 million in savings over two years, solidifying Dropbox as a pioneer in demonstrating the long-term value of moving away from cloud dependency.

These examples highlight how companies of different sizes can achieve substantial cost savings by investing in their own infrastructure rather than relying on cloud services.

We’re seeing similar results with customers, including Klink AI, which cut infrastructure costs by 500% after replacing AWS with Hivelocity bare-metal.

Shifting Financial Models: OpEx to CapEx

Moving to bare metal requires a shift in how you model your finances. The public cloud operates on Operating Expenditure (OpEx)—costs are variable, scaling up and down with usage. The downside is that these costs are often unpredictable. A single inefficient SQL query or a spike in data egress can result in a surprising invoice at the end of the month.

Bare metal generally introduces a Capital Expenditure (CapEx) component (or a fixed monthly lease if renting dedicated servers). Your costs become “lumpy” and front-loaded, but your operational running costs become fixed and highly predictable. You know exactly what your bill will be next month, regardless of how many queries your database runs. To plan budgets confidently, see what to expect from dedicated server pricing in 2026.

The “Hidden Costs”: Invoices vs. Supply Chains

Every infrastructure choice has a hidden cost. In the cloud, the hidden cost is the unpredictability of the bill—specifically data egress fees (see what you’re really paying to leave AWS) and provisioned IOPS, which can inflate TCO significantly.

On bare metal, the hidden cost is time. You trade the instant provisioning of the cloud for supply chain logistics. You cannot spin up a physical server in seconds; it takes time to order, rack, and provision hardware. This necessitates a return to capacity planning. You need to forecast your growth and maintain a buffer of capacity—typically an N+1 redundancy model—to handle spikes or hardware failures without scrambling.

Migration Strategies: Replacing the Managed Stack

The biggest technical hurdle in leaving AWS isn’t the compute—it’s replacing the managed services like S3 and RDS. You need a robust software stack to replicate that utility on bare metal.

1. Replacing S3 with MinIO

For object storage, you don’t need to rewrite your application. Tools like MinIO offer high-performance, distributed object storage that is API-compatible with S3. In most cases, switching is as simple as changing the endpoint configuration string in your application code. Because MinIO runs locally on your high-speed network, it often outperforms S3 for internal data processing tasks.

2. Replacing RDS with the Patroni Stack

Database migration is critical. You can replicate the high availability (HA) of RDS using the open-source Patroni stack.

• Patroni manages the cluster state and handles automatic failover.
• Etcd acts as the distributed source of truth for leader election.
• HAProxy routes traffic to the correct primary node, ensuring your application doesn’t need to know which server is in charge.

This stack provides a self-healing database environment that rivals managed services in reliability, without the associated markup.

For performance-sensitive databases, here’s why bare metal servers deliver more consistent I/O than virtualized cloud.

Taking Control of Your Infrastructure

Migration is not a step backward; it is a sign of maturity. It signals that your business has stable, predictable workloads that no longer require the expensive safety net of the public cloud.

By moving to dedicated servers, you regain control over your hardware, lock in predictable costs, and unlock performance that virtualized instances simply cannot match. It requires planning and engineering expertise, but the impact on your bottom line can be transformative.

If you are ready to explore what a dedicated environment looks like for your specific workload, our engineers can help you spec out a solution that fits your growth trajectory.