Have they not heard of Amazon EC2? Google Compute Engine? Heroku? Azure?!
"Adding more servers" - what is it, the 90s? Amateurs..
We've learnt that you can never add enough servers to cope with an unpredictable and quickly-changing demand curve. That's why they invented elastic computing. They add 3 servers now, next month those 3 servers can't handle. So they add 3 more, and so on and so on.
Why yes, they have. They purchased Bitomat after it collapsed because the servers crashed and Amazon couldn't do data recovery because it was in the cloud. So yes, they are well aware of cloud services.