its cost more money upfront, since companies need to invest money to build their servers/server racks. You can also still rent space in a data-center, without the need of building your own data center.

But on the long run, it can be much cheaper than constantly renting all the hardware. You can compare it to houses, buying a house costs more money then renting. But overall in the long run, you are normally better off buying a property (assuming you can of course.. its just an example).

The issue with cloud providers like AWS is that they charge for virtually everything, and that makes it easy to rack up charges if you forget about something you spun up as a test last week and forgot to terminate it. For larger companies it can be a significant issue. So there are other companies out there that you can use to scan your entire AWS account, summarize what you’re using, and highlight things you may not need any more. They’ll also recommend cost savings measures like paying for a year of server time up front instead of paying as you go. If you know you’ll need a server for a year then paying annually is a lot less expensive.

On the plus side, you don’t need to deal with things like hardware failures. We have a large AWS environment where I work, and we’ll occasionally get an email informing us that an instance is “running on degraded hardware”. A simple reboot (power cycle) will move the instance to new hardware. And if you decide you need more RAM, more CPUs etc. then it’s also as simple as rebooting.

Their servers are slow, I have seen that myself, but I don't see how it wouldn't be cheaper to use AWS other than maybe some highly specific scenarios.