[peterwwillis]

There are also more upfront costs (not just monetary), you can't scale quicky, and you lose all the managed solutions that make building things super fast and effective. Your hardware cost may be lower 10x but the operational and developmental cost will be higher as well as a limit on your business to grow.

A balanced approach is to only put the most expensive hardware portion of the business with the smallest availability requirement in colo, and horizontally scale it over time. Simultaneously use a cloud provider to execute on the cheap stuff fast and reliably.