I started my career at a company that was excellent at capacity management and prediction. Using physical hardware they never hit a capacity problem, ever, despite growing like crazy. This did require the Marketing department being in close communication with the IT department about upcoming campaigns.
Everywhere else though have been terrible at predicting future capacity needs. As far as I can tell that's because they just use tools that gives a prediction based only on historical growth.
I guess my point is that it's entirely possible to be good at capacity management, and if you are then the lead time disadvantage of physical hardware can be completely negated.
It's easier to massively over provision or use the cloud than it is to get good at capacity planning. Same as how it's easier to use a GC than it is to do manual memory management.
They are all valid strategies, the key is picking the one that suits your situation.
If you need a small to medium amount of resources then the cloud is likely the cheapest option.
If you need a medium to high amount of resources then massively over provisioning can still be cheaper than using the cloud.
The cheapest option for anything medium size and above is physical servers with good capacity management.
Good capacity management requires good internal communication between business units. And making predictions based on expected/planned events not just historical data.
Everywhere else though have been terrible at predicting future capacity needs. As far as I can tell that's because they just use tools that gives a prediction based only on historical growth.
I guess my point is that it's entirely possible to be good at capacity management, and if you are then the lead time disadvantage of physical hardware can be completely negated.