Exactly. The beauty of this is that building to scale to cloud as needed makes bare metal even more cost effective compared to cloud, because suddenly you can plan for far higher utilization rate for your fixed hardware than you could before.
One note: you don't even necessarily need your own colocated equipment. If you're in a location with expensive real estate and/or power it is often hard to beat dedicated rented servers for smaller installations, because you often have more flexibility in renting servers further from wherever you have staff than what would work if you colo and need to be able to reach your setup in person.
Rented managed servers still tends to beat cloud with good margins.
One note: you don't even necessarily need your own colocated equipment. If you're in a location with expensive real estate and/or power it is often hard to beat dedicated rented servers for smaller installations, because you often have more flexibility in renting servers further from wherever you have staff than what would work if you colo and need to be able to reach your setup in person.
Rented managed servers still tends to beat cloud with good margins.