My best guess is that you'll end up with twice the staff and management, twice the base costs and twice the marginal costs for the same amount of revenue being brought in.
Back in the 1990's, departments used to run their own servers and LANs due to IT resistance to deploying LANs. Later, these LANs were consolidated under IT. You could call the departments deploying and running their own LANs (and writing up their own apps) as competition to IT, but at the end of the day, the decisive argument to eliminate the other departments was not competition. Instead, the reasons for centralizing were for control, economies of scale, not having services duplicated, etc.
@CMS:
Let's get back to the fundamentals. Competition is not only about providing more and better goods and services at a cheaper price than the competition, it is also about providing goods and services that the competition is NOT providing, either because the competition can't or because it doesn't want to.
Centralized IT refused to provide the LAN services that the departments wanted, but the proliferation of the LANS provided centralized IT the motivation to act. On one hand, IT won the battle by establishing full control of LAN services. On the other hand, the price that IT paid was that it had to work out a way to provide the very same LAN services that the departments wanted. So, you could say that IT won the battle by losing the war.
The same scenario is being replayed with respect to cloud services, even as we speak: centralized IT refused to have anything to do with the Cloud, individual departments started going into the Cloud using their petty cash since cloud services are so affordable, and centralized IT is making the departments give up their uncontrolled access to the Cloud in exchange for centralized IT establishing controlled access to the Cloud. Again, centralized IT is winning the battle but only at the cost of losing the war.
The ultimate result is that IT wins by eventually providing the services required at a better cost and less aggravation than the departments could for themselves. If for example, every department had its own individual access to the Internet instead of shared access to the Internet, the cost to the company as a whole of keeping that access to the Internet secure would go through the roof. That's what economies of scale is about.