It is all about money and ease of use. What you are describing is how the software model used to work - it is simply easier to outsource everything. But as you

It is all about money and ease of use. What you are describing is how the software model used to work - it is simply easier to outsource everything. But as you note, of course, this usually makes things more expensive. Cloud providers and software engineers have of course come up with tons of new tools to make this outsourcing (or you could also call it renting + outsourcing) cheaper (autoscaling being a huge one) and this incentivizes moving to SaaS or PaaS infrastructure. However as these new products mature companies are also realizing they can use those same innovations in their own "on prem" infrastructure. Most of the time it comes down to how big the company is (do they hit the threshold where hiring a bunch of people to run their own datacenter or machines makes sense) and is their business long term focuses enough that they care more about the big potential cost savings vs the advantage of (from an accounting perspective) recuring regular costs per quarter vs larger occasional purchases of hardware. Personally I think we are going to see a huge "private cloud" movement in a few years once the market matures and companies realize they did not need to give absolutely everything to AWS. I have always liked the hybrid cloud model and then using SaaS only for things that are a huge pain in the ass to manage (since with SaaS you are not just renting/outsourcing the hardware but also all of the software work as well). Email is a great example of this - its a huge PIA to manage yourself and often not that costly to just pay someone else to do it. In my opinion the holy grail for many companies is having their big "regular" workloads (especially stuff computationally expensive or requiring special hardware or large storages) run themselves on their own hardware + seamless integration with a cloud provider for autoscaling that process up as needed.