Hosted vs in-house web performance monitoring - can they both get along?

As more software is delivered through the web as software-as-a-service (SaaS), web performance monitoring tools are no different.  There are a number of companies that allow you to pay a monthly fee to use their service, but many people feel that, it's better to manage your infrastructure or web application using tools in-house.  I think there is space for a hybrid option, which can take advantage of both scenarios.

One of the benefits I see with an external monitoring tool, is you get to see the performance of your web application from an internet user perspective.  I've seen issues when externally, the application is performing poorly but internally folks don't have the exact same experience.  Then the old tried and true call comes "... can someone use the cable modem and test out our site".   Depending how deep you want the external monitoring to go, there are times when you need to install an agent on each server you want managed and that can add some overhead or not and your security team may not be too thrilled about that.

Some folks, prefer internal monitoring only, but I don't think they are getting the complete picture when it comes to external web performance.  Internal monitoring can at times alert you to issues before they become know to the broader community.  Some folks have also found that moving monitoring internally that they are not dealing with issue outside that may skew their performance results, whether its a poorly operating content delivery network (CDN) or bad internet connection from their provider.

What are your thoughts on in-house vs hosted web performance monitoring solutions?

Is there are difference between the two?

Do you leverage both services, targeting specific areas for each to monitor?

Do you prefer on over the other?

Does cost come into play when deciding on a solution?

Let me know your thoughts, and how we can build better monitoring services that can manage the entire stack from infrastructure to application.