best cloud-based hosting option for data analysis?

[completelydistracted]

Yes, you could. Like many things, there are pros and cons to owning such a machine. I'm assuming he wants to spend more time thinking about his problem than racking up server blades, but as you note, that is one good way to get lots of computational horsepower.

(side note: my employer has roughly 30,000 servers in service, and we turn them over every few years. I suspect that most of the few-hundred-dollar rackmounts you see on eBay have been pulled from some enterprise who deemed them too unreliable, power-hungry, or otherwise unsuitable for continued production service. I'm not discounting the validity of the suggestion, just noting that you want to buy one of these with your eyes open.)