SaaS products are infrastructure. Each different SaaS used is another piece that needs to be connected to the system and maintained; it thus becomes part of the system infrastructure. Each new SaaS piece has costs (time and money) associated with it.

That said, it's up to the individual company to decide if the added cost is worth it. Just because the cost exists doesn't mean it isn't worth it.

Open source software nowadays are very easy to use.

If your guy couldn't get a single open source software straight, you had the wrong guy :(

I can only see managed service useful when I had 100X traffic and when strong SLA is required.