Opportunity for Outsourcing IT services around the Cloud – Part-1

Money Morning today reported that “The Bright future for Cloud computing is becoming much clearer” , The report mentions that the Global sales of cloud services will rise 17% this year, to $68.3 billion from $58.6 billion in 2009, according to the research firm Gartner and sales are poised nearly to double by 2012, to $102.1 billion.

Cloud services enables IT operations to be outsourced for Corporates and enterprises as well as enables Independent Software vendors to offer their software in a service model (often on a pay as you go SaaS model) for various business consumers. Then there is plaform as a service (PaaS) through which developers can build their own software applications for various business verticals and then offer it on a SaaS model. An example of this is force.com

Overall the emerging landscape of this evolution seems to indicate that a huge number of software applications might be moved  to and be built on various cloud services. Now , If we look at the case of Enterprises moving their IT operations to the cloud, according to a news article from Gartner , many enterprises  may be just examining cloud computing and cloud services, but are far from convinced that it is appropriate for their requirements and that this is  expected to offer a significant opportunity for existing IT services players to evolve their existing outsourced IT services  offerings . This news article also mentions that  enterprises are also concerned about the Security and other Service and Vendor maturity aspects. In a related context , Charles Babcock from an article in Informationweek says that the early uses of cloud have been for experimental and non-mission critical purposes and the next phase of the cloud computing will include mission critical operations to conducting business online.

The above cited trends is a strong indicator that Enterprises may be first looking at moving a lot of their Non-Core or Non-mission critical or the so called departmental applications used in their business. In my opinion,one of the other key reasons or motivation that more and more non-core applications will be moved to the cloud first may be because Organisations are always looking at reducing the TCO of non-revenue generating ,non-core IT operations especially those enterprises with dozens or hundreds of departmental apps.

Now, Moving all these Non-core ,departmental IT operations and Software to the cloud is one of the key opportunities to be identified and leveraged by the IT Services providers especially the Offshore,Global delivery IT Services firms . The motivation for this is that “Non-Core” IT operations typically carries the lowest budgets and priorities within the organisations and therefore  the chances are high that CIOs and IT Managers may not be willing to spend a lot of efforts ,resources and money towards transitioning the non-critical operations to the Cloud.  This presents a great opportunity for Offshore IT Service providers with the right capabilities ,who can do this kind of work at a lower cost. Offshore providers with access to resource pool and the ability to scale will be better positioned to serve enterprises moving to cloud as their scale of operations can be higher. More than one offshoring provider may also stand to benefit if enterprises decide to de-risk their outsourcing of their Cloud deployments.

Based on the above ,Listed here is a gist of the sort of Cloud computing IT Services opportunities that may be tapped in to for the Corporate or Enterprise segment

  • Cloud services porting & migration consulting (Assessment,Strategy, Advisory etc)
  • Cloud migration & porting services
  • – Systems Analysis  & Architecting for the cloud,
    – Cloud provisioning and related software devl.
    –  Systems and Software/Apps porting
    –  Cloud Setup and data migration
  • –   Testing & Quality assurance (Funcrtional,Load,security tests, QA etc)
    –  Cloud monitoring/Administration
  • –   Cloud services Support
  • Special tools development  etc

This is quite a lot , isnt it!!


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