Why use a hybrid service? There are several reasons. First, they are designed to quickly scale to your needs, making them ideal for peak load projects or to deal with unexpected heavy demands that your in-house servers weren't designed to handle. Rather than purchasing their own server hardware, scientific instrument supplier Varian was able to run a complex series of several weeklong mathematical simulations in under a day using Amazon's high performance computing resources. They were able to dynamically scale their processing up to execute the simulation, then shut down when calculations completed.
Second, they operate around the clock and in different data centers around the world, making them appealing to global businesses or those that want to be thought of that way. While this could be an issue for some managers who want to drive to see their servers in a nearby facility, it can provide for a level of redundancy and reliability in case of weather- or other incident-related outages at headquarters.
Third, they are reasonably priced, especially when compared with traditional outsourced or managed hosting providers. Some of the fees are quite reasonable, such as Verizon's CaaS or Amazon's Web Services, whereby you pay for a running machine at pennies per hour. Others such as Skytap.com charge $500 a month to get you started with hosting an entire virtual network.
What about the inherent insecurity of the cloud? Some of this is more about managing perceptions than any actual reality. "The evidence is that data is just as secure and in many cases more secure in the cloud," says Dave Cutler, general manager with Slalom Consulting, a national consultancy in Chicago. "The larger companies can be more rational about this decision, where smaller companies might have a key executive who can nix the entire deal, such as the CEO, with more emotional rather than factual reasons behind the decision."