Should My Startup Use Cloud Services or Local Equipment for Hosting?

We’re a small startup preparing to launch our web application. Our outsourcing partner recommends purchasing local equipment for hosting, but we’re considering cloud services like AWS for flexibility and easier maintenance.

Here are the key factors:

1. Early stage with unpredictable resource usage.
2. Limited budget but need scalability.
3. We want to minimize costs without compromising service quality.

What approach would you recommend for startups in this situation? Are cloud services generally more cost-effective and scalable in the long term, or should we start with local equipment and later migrate?

Any advice or shared experiences would be greatly appreciated!