View Point :Cloud computing may be more harmful to IT cos than anti-offshoring moves

In my earlier blog post dt Sept 24th, I had posted my view points about the Cloud Services possibly lowering the demand for off-shoring IT services. Last week Economic times carried a news article on what technology strategist John McCarthy  said again in this regard citing  that “Cloud computing may be more harmful to IT cos than anti-offshoring moves”

In this news article,he says that in order that the IT service providers need to stay at the top of this change ,they must have

“A ruthless focus on process excellence”

“Portfolio management with a product marketing and solution packaging mindset”

“A sales strategy that builds a new type of client relationship; a culture and processes that drive success across client and partner ecosystems” and

“A  management vision underpinned by strong governance”

Given this, Mr McCarthy also says top Indian service providers are on track to create domain expertise and capabilities, moving up the chain from vanilla application maintenance and development.

In my viewpoint, as I had opined earlier in my blog post , It’s high time that Offshore IT service providers take stock of this emerging scenario seriously and re-plan their business strategies.

I personally feel that the IT services firms catering to the SMBs (small and medium business organizations) might have to worry more with this impact and have more chances of their revenues being dented than large IT (offshore) services providers like Infosys or TCS or Wipro or Accenture which typically serves large enterprises or derive a significant volume of their revenues from large companies. My take on this is based on a survey information published by SandHill research on the adoption of the cloud computing services that indicates a higher interest and adoption of the Cloud by SMBs. The other reason being that SaaS or Cloud based services offers a great value proposition for SMBs who wants to bother least about running their own IT operations and reduce the costs.

To this extent my view points  contrasts a bit with John’s saying. I think Mid size Indian IT (offshore) services companies have to take more initiatives and build domain and other high value add capabilities and business offerings than their larger counterparts to positively turnaround the impact of Cloud computing based IT outsourcing..

The above mentioned high level messages to manage this change as indicated by John McCarthy have to be decrypted and suitably evolved by each Offshore IT services provider based on their own business and organizational scenarios.

Again,as indicated by John ,I believe,other than the need to closely manage the client relationships,New IT Service offerings, Value propositions and Differentiators will become the order of the game in the coming days and Cloud computing will be the agent of bringing in such a change!

If you are an Offshore IT Services provider,especially if you derive your revenues mainly from the US market and if you are serving SMBs, it’s better to get in to the act now!


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One Response to View Point :Cloud computing may be more harmful to IT cos than anti-offshoring moves

  1. Jim Chiang says:

    I agree with this article. In fact, I wrote a blog about “Prediction: Cloud computing will speed the offshoring and further virtualization of IT services”

    Please check it out at:


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