I put our company onto a hybrid AWS-colocation setup to attempt to get the best of both worlds. We have cheap fiddly/bursty things and expensive stable things and nothing in between. Obviously, put the fiddly/bursty things in AWS and put the stable things in colocation. Direct Connect keeps latency and egress costs down; we are 1 millisecond away from us-east-1 and for egress we pay 2¢/GB instead of the regular 9¢/GB. The database is on the colo side so database-to-AWS reads are all free ingress instead of egress, and database-to-server traffic on the colo side doesn't transit to AWS at all. The savings on the HA pair of SQL Server instances is shocking and pays for the entire colo setup, and then some. I'm surprised hybrids are not more common. We are able to manage it with our existing (small) staff, and in absolute terms we don't spend much time on it--that was the point of putting the fiddly stuff in AWS.

The biggest downside I see? We had to sign a 3 year contract with the colocation facility up front, and any time we want to change something they want a new commitment. On AWS you don't commit to spending until after you've got it working, and even then it's your choice.