> Self hosting doesn't scale
That's just not true. There are plenty of companies that self-host highly scaling infrastructure. Twitter being just one of those companies. They've only recently started thinking about using the cloud, opted for Google, and that's only to run some of their analytics infrastructure.
> There is very little reason for a good sysadmin to work for International Widgets Conglomerated when they can work for a cloud provider instead, building larger scale solutions more efficiently for higher pay
That's not true either (speaking from personal experience working for companies of all sizes, from a couple dozen employees on up to and including AWS and Oracle on their cloud platforms). For one thing, sysadmin is far to broad a job role to make such sweeping statements.
A whole bunch of what I do as a systems engineer for cloud platforms is a whole world of difference from general sysadmin work, even ignoring that sysadmin is a very broad definition that covers everything from running exchange servers on-prem, to building private clouds or beyond.
These days I'm not sure I've even got the particular skills to easily drop back in to typical sysadmin work. Cloud platform syseng work requires a much more precise set of skills and competencies.
All that aside, I can point you in the direction of plenty of sysadmins who wouldn't work for major cloud providers for all the money in the world, either for moral or ethical reasons; or they're just not interested in that kind of problem; or even just that they don't want to deal with the frequently toxic burn-out environments that you hear about there.
> I'd rather buy an off the shelf service used by the rest of the F500 than roll my own.
No where near as much of the F500 workload is on the cloud as apparently you'd believe. It's a big market that isn't well tapped. Amazon and Azure have been picking up some of the work, but a lot of the F500 don't like the pay-as-you-go financial model. That plays sweet merry havoc with budgeting, for starters. It's one reason why Oracle introduced a pay model with Oracle Cloud Infrastructure that allows CIOs to set fixed IT expenditure budgets. Many of the F500 companies are only really in the last few years starting to talk about actually moving in to the cloud (when OCI launched at Oracle OpenWorld, there was a startling number of CIOs from a number of large and well known companies coming up to the sales team and saying "So.. what is this cloud thing, anyway?"
> Successful companies outsource their non core competencies
Yes.. and no. Successful companies outsource their non-core competencies where there is no value having them on-site. That's very different.