Cloud an Outsourcing Option in Troubled Times

By Jack Singh and Charles Arnold  |  Posted 02-11-2009 Print Email

The cloud emerges as a serious contender for companies interested in IT outsourcing.

About a year and a half ago, no one was talking about cloud computing as part of IT outsourcing (ITO) deals. But now, in today's climate of deferring capital expenditures and finding short-term savings, most everyone has their head at least partially in the clouds. That is, most companies that are considering ITO are also considering whether cloud computing is right for them.

And with good reason. As Tier 1 service providers like CSC, HP and IBM invest billions in their clouds, they're increasingly offering cloud computing as part of their services - which stands to change the landscape of IT outsourcing. Many deals will become less complex, less dependent on labor arbitrage in offshore markets, and more easily implemented.

Even more, cloud computing can enable companies to potentially exit their capital-intensive data centers, which in many organizations are seen as a problem child. Currently, for example, one international consumer goods organization with more than 100 servers and 15 data centers in the Americas is considering a service provider's cloud as an alternative - which could reduce its operations to a mere four servers at a single data center.

Add it up, and cloud computing is likely to put a new spin on IT outsourcing - one that bodes well for buyers. 



 

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