It was definitely closer to the former than the latter. Things that are obviously profitable now were not hip or obvious, nor was the infrastructure to commoditize everything available.
To give one example that goes back a little further, companies used to handle the whole payroll process themselves. Now they use ADP or whoever.
There's also been a lot of automation/self-service of mundane tasks. You don't really have the stereotypical "starting the mailroom" job any longer nor do you have the steno pool.