Cloud and the Global Sourcing Market: Follow the Discussion at the NASSCOM India Leadership Forum

One of the key questions many traditional information technology (IT) service providers are asking themselves is: How will cloud computing affect my outsourcing business?

These providers are wondering whether cloud will take share from their existing managed services business. Or, will it create even more opportunities? Time will tell, but it’s clear that enterprise buyers want cloud as a part of their IT service delivery model, and they’re starting to demand it from their providers.

Although it will take some time to fully understand the impact of cloud on the global sourcing market, some emerging trends in both the sourcing market and the cloud market provide an interesting glimpse into the future. First, let’s take a look at three of the four key, long-term sourcing structure trends discussed by ISG during the most recent 4Q11 Global TPI Index:

• A shift from longevity to disposability in outsourcing contracts
• A shift from pricing bands to utility pricing
• The new global shape the service provider community is taking

What’s interesting here is matching up what’s happening in the broader outsourcing market to what enterprise clients are asking for in cloud technology. Here are a few of the recurring themes we’re hearing from chief information officers and business unit leaders when the discussion turns to cloud:

• We need to move faster and to be more flexible to meet business demand
• We want to pay for what we use and want transparency into our costs
• Who has the capabilities to help us meet these needs on a global scale?

Clearly, there appears to be a correlation between how the outsourcing market is changing and what enterprise customers want.

To what degree is cloud responsible for driving this change? This is one of the key questions that we’ll be exploring at this year’s NASSCOM India Leadership Forum, February 14 – 16 in Mumbai, India. I’m thrilled to have the opportunity to moderate a panel discussion about this very subject on Wednesday, February 15. If you’re on Twitter, I encourage you to follow along using the official hashtag for NASSCOM ILF: #nasscom_ilf.

Look for a follow-up post after NASSCOM where I’ll summarize some of the key points of view around this exciting topic.

About the author

Stanton helps enterprise IT and sourcing leaders rationalize and capitalize on emerging technology opportunities in the context of the global sourcing industry. He brings extensive knowledge of today’s cloud and automation ecosystems, as well as other disruptive trends that are helping to shape and disrupt the business computing landscape. Stanton has been with ISG for more over a decade. During his tenure he has helped clients develop, negotiate and implement cloud infrastructure sourcing strategies, evaluate and select software-as-a-service platforms, identify and implement best-in-class service brokerage models, and assess how the emerging cloud master architecture can be leveraged for competitive advantage. Stanton has also guided a number of leading service providers in the development of next-generation cloud strategies. Stanton is a recognized industry expert, and has been quoted in CIO, Forbes and The Times of London. You can follow Stanton on Twitter: @stantonmjones.