[dotBen]

The ultimate hybrid is to find a budget VPS (or premium VPS) provider who is based in the same datacenter as your 'bare metal' servers. Granted VPS != cloud, but depending on your requirements you might get the same benefits.

The benefit here is that you can exchange data between servers/VPS's via the private LAN - low latency and potentially no bandwidth costs.

If you go with an Amazon based solution then you don't have this benefit due to the NAT-like way Amazon works and the fact they either own their own datacenters or at least don't allow any private routes between other servers in the same DC.

(I don't know whether every Amazon availability zone is in a wholly operated Amazon datacenter)