Cloud Computing is heralding a wind of change in the outsourcing world. Will it change outsourcing as we know it, or is it just old wine in a new outsourcing bottle?
Before I confuse you with too many metaphors and similes, let’s get the definition of cloud computing down pat. What is cloud computing? Gartner’s version? “A model characterized by location-independent resource pooling, accessibility through ubiquitous networks, on-demand self-service, rapid elasticity and pay-per-use pricing.” They are not kidding, mind you. According to Larry Ellison, “Cloud computing is about a platform, on which to run a wide variety of applications and tools. It must be virtualized and elastic, including both hardware and software”
For those of us who have been hearing words like SaaS and ASP, here are some more. Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) are the different types of cloud services. These services can be deployed in a Public, Private or Hybrid cloud model.
If some of you think these sounds like old wine in a new bottle, this old wine is creating enough buzz to threaten outsourcing as we know it today. According to A.T Kearney’s Arjun Sethi, traditional IT outsourcing will be extinct in 5 years.
“We define traditional IT outsourcing as multi-year contracts based on developing and maintaining custom code and running on the backs of legions of programmers and on-site systems integration work. We foresee a new model wherein outsourcers will provide standardized software solutions on a per-use basis. For that, they will combine and leverage BPO services with cloud-based technology. This approach will enable customers to outsource entire business processes and just pay for whatever information is accessed or used.”
On the other hand Technology leaders assert that cloud Computing would change the IT outsourcing model from application development to solution development using cloud services. According to Kris Gopalakrishnan, CEO and MD of Infosys –
“Economic uncertainty and competitive pressures are fundamentally raising performance demands on the enterprise. Success hinges on freeing capital and talent to focus on operational effectiveness, customer-facing innovation, and growth. Business solutions based on cloud technologies offer that freedom. Companies will increasingly consume IT as a mixture of cloud and services.”
So is cloud computing good or bad for the outsourcing industry? How do you think it will affect your business?