You'd colo if you didn't want to use public cloud. The savings are good over time, but the upfront cost can be huge depending upon how much disk space you need. The setup/config can also be rough (many 4U boxes packed with tons of disks each, then CephFS + Rados for S3 api). You also want to have a few configured nodes on cold stand by, and many extra disks. Because of this, I've seen some companies take compute off the cloud but leave bulk data storage on the cloud.