Technology

Normally, you’d run a cluster of multiple servers to host such workloads, but imagine if all those resources were available on one physical hosts - it’d be a lot more effecient, since at the very least, you’d be avoiding all that network overhead and delays.

Exactly! Imagine you have two services in a data center. If they have to communicate a lot with each other, then you would prefer them as close to each other as possible. Why? Well it's because of the difference between sending a request over a network vs. just sending it to another process on the same host. It's much more efficient in terms of latency and bandwidth. There are, of course, downsides and other other costs (like the fact that the cores that are handling the requests themselves are much less powerful), so you have to tailor your hardware allocation to your workloads. In general, if you're CPU-bound, you would want more powerful CPUs (necessitating fewer cores per host for power reasons), and if you're I/O bound, you want to reduce network latency as much as possible.

Now imagine you have thousands of services. The network I/O can get pretty extreme. Plus, occasionally, you have requirements like the fact that any data traveling from one host to another must be encrypted. So if you can keep as many services as possible on a single host, you reduce a lot of that overhead as well.

tl;dr: everything comes down to trade-offs and understanding the needs of your workloads, but in general, running 300 low power cores is probably indicative of an I/O-bound application and could hypothetically be much more efficient and cost-effective.