I think that is a false dichotomy - it's not a case of either you use the cloud or you build a data center. There are a lot of options where your kit is in someone elses data center - from part of a rack, through to cages with a few racks right up to pretty big rooms.

You pay your money, get your own private space in a DC, they provide the power, cooling and physical security and you supply the kit and buy connectivity from one of the ISPs/telcos that infest these places.