[vidarh]

That's true, but those are extreme niche use cases, and in most cases people have a substantial base load that they can run on dedicated servers for anything from 1/2 to 1/3 of the cost of AWS/Azure/Google (even with reserved instances and factoring out retainers for someone to handle ops issues).

Nothing stops you from mixing and matching dedicated servers with handling batch jobs and peaks with cloud servers. In fact, most data centre providers can offer the full range from unfurnished colo space to cloud offerings out of the same data centre these days - either directly or via partners hosted in their buildings. At least that's my experience.