Re: First they trusted
"Non reliance on a third party for business critical systems isn't expensive. Skills are rare though,"
I'm sorry? That's very expensive. Oh, I know what you were going for--hardware on prem can be less expensive than the cloud. Maybe you were also going for license-free software too. But let's look at the typical third parties a business relies on and how expensive it would be to not rely on them.
Real estate: Most businesses rent their buildings. Many don't need a full building and share with other businesses. Some that need a building like the reduction in risk that comes from renting, or want to be able to move quickly. In order to run a business without renting, they need to purchase one or more buildings. This is very expensive, especially if the business is, like many businesses, located in an urban area.
Electricity: Most businesses get the power to run their building, their servers, and everything else from the grid. Of course they run local generation for backup purposes, but usually only enough to keep the absolutely critical systems running for a short time. If they wanted to have complete nonreliance, they'd effectively have to build their own electrical plant, requiring extra real estate costs not to mention the costs for the generation capacity. Even if they are allowed to use the standard electricity supplier so long as they can switch over, they'd probably need to buy a lot more generators and fuel in order that, when power from the grid fails, the situation is "everyone can keep working in the building" rather than "the public servers won't go down".
Communications: The company would have to be an ISP. That's the only way not to rely on anyone else. Well, actually, they'd still rely on the other ISPs and tier one communications companies, but not much can be done about that. I forgot, they probably run a phone line for customer support or at least sales, so they'll have to be a telco too.
Outsourcing: Many companies choose to have some roles, like cleaning, recruiting, or even HR, outsourced to another provider. They pay that provider, who provides the people who can do that task, manages them, and pays them. There are many additional companies who keep that all in house, but most of them are either very small, requiring little of those services, or very large.
That's without considering other tasks that the company might do and rely on, like sales which might be assisted by resellers or retailers, advertising which relies on external media, or hardware from servers to office chairs which probably is not all manufactured by the company.
Let's also consider the original point. The desire is to avoid any other services. Most people can do that; machines were meant to run on prem and were designed with that in mind. However, imagine a situation where a lot of scalability is desired but the hardware for that is not always needed. You can get that on the cloud for relatively cheap. Obtaining that on prem is expensive because you have to keep a bunch of hardware frequently underutilized. What if you want geographic distribution, either for lower latency or increased redundancy in case of problems in one area. Cloud has that covered as well. Implementing that without external requirements means the company will have to purchase extra servers and physically bring them to various places. Because we're going for "Non reliance on a third party", it's not enough to rent space in a datacenter because what if the people running it didn't set up backup power right? So that's purchasing a building in another area, country, or continent just for keeping servers in.
I frequently prefer not to run services on the cloud, and I'll be the first to argue that there is too much emphasis on cloud over non-cloud. But it is expensive to have things that don't rely on a third party. Sometimes, the cloud is in fact worthwhile.