If your peak demand is 100x your baseline and only happens for ~1h each day, cloud is almost certainly a good choice. If it happens for ~12h a day or it's only 5x your baseline, the cost of the cloud is such that you're likely to save with dedicated hardware, even though much of your hardware sits around doing nothing part of the time.

> never have to worry about ordering new servers a month in advance so I have enough capacity when (or if) I need it.

There is a middle-ground that's very much worth considering: renting dedicated servers. It's not quite as cost-effective as colocation and owning your hardware when you have at least a cabinet worth of stuff but it does offload the management of the hardware and provisioning to somebody else. They can also usually be provisioned in a matter of minutes.

In some cases (e.g. Packet.net) these machines can even be treated essentially like cloud instances, with hourly pricing.

There's also yet another middle ground: using dedicated to handle the known and predictable baseline traffic and using the cloud to handle the unexpected bursts.