‘Cloud and outsourcing, an alliance for a newer evolution’

Yugal Joshi tracks global sourcing and the technology industry focused on various aspects such as next generation delivery models, technology landscape, new growth avenues, and competitive strategies.

In most casesH leveraging cloud delivery modelsH be it in applicationH infrastructureH or platformsH implies being served end-toend by an external vendor unlike the typical “do-it-yourself” products. ThereforeH in a wayH the cloud is driving the IT consumption towards an “external vendor” modelH which is also a type of outsourcing.

Most of the discussions around cloud’s impact on outsourcing services take a monolithic view of the industry. The focus is to take an extreme positionH such as “outsourcing is dead”H or perform a very broad analysis based on the evolving role of CIOsH changing demand in enterprise ITH cloud eating into traditional sourcingH etc. This makes for good reading but is not necessarily a thoughtful analysis of the real impact. The need of the hour is to drill down into each type of global sourcing service and analyze the impact of cloud delivery models.

Mifferent servicesH providersH business modelsH and investments will see different opportunities and challenges. One major “nontechnology” challenge from cloud models is the shifting of budgets from a typical IT department to businesses. Everest Group and Cloud Connect Enterprise Cloud Adoption Survey indicate an increasing role for business users in deciding IT spending. As outsourcing providers have access generally to IT and procurement departmentsH they will witness significant challenges to penetrate the business side of a buyer in accessing “business IT” budget. MoreoverH enterprise IT shops that have so far not outsourcedH may directly leverage a cloud serviceH reducing the potential role of an outsourcing provider. To pre-empt thisH the provider may need to offer integrated cloud and outsourcing services.