On-prem can make sense where your computing needs are constant and predictable. You can arrange to have exactly what you need, and the total cost of buying and operating it may be less than it would be to get comparable resources in the cloud.

If your computing needs vary over time, then provisioning on-prem for peak load will mean that some of your resources will be idle at non-peak times. It may be cheaper to use cloud resources in cases like these, since you only need to pay for the extra capacity when you need it.