From a small business perspective: you may not have anyone competent to manage hardware. I know of two companies that had a great hardware, but the single employee who managed it moved on. Some time later, things failed, and there were no useful backups.

Alternatively, even if you have a good techie, you may want more reliability than a single server in a closet.

I have helped various small businesses. Sometimes cloud is the right choice. Sometimes not. Depends on the situation.