We're running everything on our own fully owned colocated servers, yet we're running everything in virtualised environments. Private clouds are attractive for many of us because of the management benefits of being able to use a VM as the unit of deployment. It also makes sense to increase isolation, as colo space is expensive enough to justify servers that are much more powerful than many of the apps we run needs (our typical new setups start at 16-24 cores these days, and I expect that to be 32-48 cores by year end), so we want to co-locate many apps on the same servers but don't want them to able to interfere too much with each other.
In fact, we have some systems where things are even deployed in containers inside VMs for various reasons...
I think that's more due to hosting providers being able to sell far more "machines" than they have hardware for.