by Stanton Jones, Analyst - Emerging Technology, ISG
One of the key questions many traditional information technology (IT) service providers are asking themselves is: How will cloud computing affect my outsourcing business?
These providers are wondering whether cloud will take share from their existing managed services business. Or, will it create even more opportunities? Time will tell, but it’s clear that enterprise buyers want cloud as a part of their IT service delivery model, and they're starting to demand it from their providers.
Although it will take some time to fully understand the impact of cloud on the global sourcing market, some emerging trends in both the sourcing market and the cloud market provide an interesting glimpse into the future. First, let’s take a look at three of the four key, long-term sourcing structure trends discussed by ISG during the most recent 4Q11 Global TPI Index:
- A shift from longevity to disposability in outsourcing contracts
- A shift from pricing bands to utility pricing
- The new global shape the service provider community is taking
What’s interesting here is matching up what’s happening in the broader outsourcing market to what enterprise clients are asking for in cloud technology. Here are a few of the recurring themes we’re hearing from chief information officers and business unit leaders when the discussion turns to cloud:
- We need to move faster and to be more flexible to meet business demand
- We want to pay for what we use and want transparency into our costs
- Who has the capabilities to help us meet these needs on a global scale?
Clearly, there appears to be a correlation between how the outsourcing market is changing and what enterprise customers want.
To what degree is cloud responsible for driving this change? This is one of the key questions that we’ll be exploring at this year’s NASSCOM India Leadership Forum, February 14 – 16 in Mumbai, India. I’m thrilled to have the opportunity to moderate a panel discussion about this very subject on Wednesday, February 15. If you’re on Twitter, I encourage you to follow along using the official hashtag for NASSCOM ILF: #nasscom_ilf.
Look for a follow-up post after NASSCOM where I’ll summarize some of the key points of view around this exciting topic.