Jan 18

The last decade has seen IT outsourcing mature from being an innovative service for a few to a standardised utility that a wide range of companies take advantage of.

Outsourced services such as desktop and server support, which makes businesses more efficient, have been provided by external suppliers for so long that there is little left to outsource.

Strategic outsourcing, which makes a business more effective, has taken a back seat as many have chosen outsourcing to cut costs.

This decade will see applications become utilities that are accessed via the Cloud. There will be little to differentiate suppliers of these services other than price.

Large companies like Microsoft and Google will have hectares of datacentre space to provide cloud services in massive volume to businesses all over the world. Economies of scale will allow them to cut prices to the bone.

As one software developer recently told me, true cloud computing will mean the best applications will be available to any business at the point of use. At the press of a button a user will be able to request a service and automatically get the most appropriate one depending on the price and other variables such as security.

But this further commoditisation of IT services could actually spur more investment in strategic outsourcing.

If everybody uses the Cloud for the IT services that merely increase efficiency, businesses will have to differentiate in other ways. The Cloud Computing silver lining could be that it gives CIOs time to pay more attention to strategic outsourcing. If IT services that do not offer competitive advantage are supplied in the cloud, at extremely competitive prices, the CIO will be able to focus on strategic IT and will have more money to spend on it.


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