organisations should specialise on what is core to their business. That part should never be outsourced, but everything else either should be completely outsourced or operated in a manner that prioritises a stable and efficient service to the broader organisation. Effectively replicating the benefits of outsourcing, while mitigating the downsides we've all suffered.
Therefore if you innovate within your core business, but prioritise the capabilities within the support arm of the organisation, as appears to be the moral of the story, then you are holding the stick wrong. I think many CTOs and CIOs feel connected to their enterprise backoffice support backgrounds, to the detriment of business value.
There's clearly a balance that must be found, skills and control within your supporting services are important, but its the core business that should drive innovation. In the story in the article, I would have refocused the team on the product platform (assuming those skills werent there to begin with) and thought long and hard about my dependence on skills for 'mainstream' systems that didnt make me any money. They had effectively invested in skills and capabilities that didnt offer a competitive advantage. The good staff will adapt and thrive.