To add to this - Not only is it someone who only cares about your prompt payment, it is someone who also is beholden to their own shareholders/owners, not yours. They couldn't care less about your shareholders. The only thing about you they care about (if you're lucky) is that your business stays viable enough to continue to pay for the service. Naturally, their shareholders what to see growth so the service provider will strive to meet that expectation and eventually it becomes a matter of scale - Now you're part of a mass production arrangement where YOU are the product and some product loss is factored into the cost of doing business. Woe to those who find themselves swept up in the product loss side of the equation.
Contrast this with doing things in-house where you retain the control over the service. You control (at-will nonetheless) who works to provide the service. Anytime you're dissatisfied you can change it to how you like it. Of course you need to pay to implement, maintain, and sunset the solution. Naturally there could be staffing involved. The staff and solution might not be one-trick ponies dedicated to one service, however, so that should be factored in.
Now, being in small business like I mentioned, there's some pragmatism required. Should everyone run their own data center? Should everyone have a bunch of IT staff in-house? Of course not. But, every time you want to implement a new solution or a vendor comes a-knockin' we should be asking a few questions.
- If this service becomes mission-critical what level of service do I expect and will the host be able/willing/still in business to provide it?
- If the service provider discontinues the service how will that impact my business?
- How will I recover when the service provider discontinues the service without notice?
- Is the cost of providing the service in-house be greater than the cost of the hosted service PLUS outages, poor performance, service problems, long support response times, botched upgrades, etc, etc?
And that just scratches the surface.
There are some services that a business cannot provide for itself. An organization's size can really limit the benefits to an in-house solution. I frequently hear email as one service that should be put "in the cloud" since it doesn't make sense for small businesses to do that for themselves. However, if Office365 has a 9-hour outage during the day was the trade-off really worth it? How much business could've been lost in that period? Could that realtor have missed a sale that day and thus a commission? Did that tool and die manufacturer miss out on a contract during that outage? These may be recoverable losses but for a small business it can have a significant impact both on reputation and the bottom line.
The bottom line is: Don't be so quick to rule out in-house.
IT needs to step up and be flexible to be able to provide services the organization needs too. Management likes hosted because the solution is built out already and they can get the "New Shiny" as soon as the contract is signed. Everyone needs to look at the facts together and take the emotion out of the decision. Bottom line - does it make business sense to provide the service in-house or pay a disinterested 3rd party to provide it for you. It's a business decision...make it about the business.