Having run Cloud66 for the past year, I can say that actually managing infrastructure and dealing with security management such things would have been prohibitively expensive. Cloud66 has taken care of things like heartbleed and package updates (and alerts for rails updates). It's been a good experience in that I learned that I really do want a managed hosting environment - since I can see what they've done, but don't actually have to do it myself.
I would also love to hear a cost benefit analysis a year into managing your own servers.
I would also love to hear a cost benefit analysis a year into managing your own servers.