At PGConf India, one of the keynotes addressed exactly this topic. The largest stock broker firm in India had made the decision to self-host everything. The CTO made a number of points that I think are missed in this discussion and article, namely:

1. You may think you are a software company, but HR, accounting etc are just as critical to your operations as the customer product. Therefore there isn't really a distinction between core business and non-core business that people like to think, and

2. By self-hosting you ensure you learn the technology and can therefore respond to problems yourself. In an environment where businesses are increasingly on the hook for defects in their services to the end user, that's a good thing.

Obviously hiring knowledgeable people is probably the bottleneck but it is still a cost saver and it is important to create an organizational culture where people can learn the technology on the job.