No, it's the business continuity way of thinking. Outsourcing commodities -- such as servers, virtual or otherwise -- is one thing.
Outsourcing your core operational tools, software, and all your data is another matter entirely. Preferring SaaS at a company large enough to afford on-premise solutions is just nonsensical, and I expect it'll either blow up in his face, or just create a never-ending tax on end users who are constantly dealing with a mishmash of vendors, accounts, disappearing services, broken software, and instability.
At scale, stability and continuity is worth more than the opex/capex costs of internal IT.