We killed the local datacenter a decade ago when we started renting iron to house our own cloud. The majority of our systems still operate on VMs in that setup, but even that is more expensive than going full Azure/aws. We don’t, because a lot of our legacy systems wouldn’t run in the full cloud and if we need a SQL cluster on our own internal network anyway, then we might as well use it. Though, we’re nearing the point where a DB cluster in Azure will be considered our own network.
Then there’s the stuff we can’t do, like spin up 5000 servers on demand. Say we train some ML to find something specific missing from millions and documents. With Azure we can call Microsoft and plan to execute this, and they’ll give us exactly the resources we need for exactly how long we need it, and you just can’t beat that.
So it’s a cost-benefit thing. By going Azure and AWS, we get to spend more money on our primary function, which isn’t IT.