There is some back and forth on the "best" approach to hosting infrastructure, but there is no silver bullet or always right answer. There is a full spectrum for hosting infrastructure options, and each company has to pick the hue/tier(s) that delivers for them best a particular point in time and realize that it will likely change as time moves on. At each hue/tier, you trade man-hours and in-house expertise for cost. Typically, you see companies move backwards down the choices as time goes on to find that optimal spot.

  - Multi DC colocation, building your own servers/network equipment
  - Multi DC colocation, buying servers/network equipment
  - Single DC colocation, building your own servers/network equipment
  - Single DC colocation, buying servers/network equipment
  - Dedicated servers
  - VPS servers
  - Virtualized servers as a service with barebone supporting 
  infrastructure (e.g. Digital Ocean)
  - Virtualized servers as a service with robust supporting 
  infrastructure (e.g. AWS)
  - Platform as a service (e.g. Heroku)

You do see companies get into "trouble" where they might have picked the right hue/tier but haven't reflected upon the choice in some time. In those cases, you might see a startup dropping 60k a month on AWS services when they would have no earthly business spending more than 10k amortized on a multi-DC/added hires approach (I've observed this exact scenario).