Recently an article from ATK is in discussion- "The End of Outsourcing (As We Know It)"
Article itself is here
An interview with one of the authors is here
Summary from my perspective
- Google, Amazon and others are making big inroads in the area of cloud computing and have gathered know-how to provide the benefits of their huge infrastructure to other companies.
- Vendors like these would keep instances of applications on their systems and provide their use to clients as a service- so pay per user, or pay per transaction. I think 'Software as a Service' is someone else' registered term, so the authors invest another term 'Pay as you drink'.
- To say it bluntly, current set of IT outsourcers will die. Some will be acquired, others will starve of clients as all business would go to Amazon, Google etc. In the end, it would be Google, Amazon and IBM who would rule this area.
Its interesting view point, gives quite some points to think about. But not the one I entirely agree with-
1) ATK seems to be assuming that all applications being built and managed by IT outsourcers (lets group them all under this one umbrella term) are so standard that firms can start taking them from service providers.
However, I agree that there is growing trend to move towards SaaS. Already in the payments area companies are providing entire mobile banking platform to banks for use on transaction basis. So such outsourcing from banks to service provides would definitely happen. But I doubt if Googles and Amazons would want to get into these specific (domain specific, or market specific or ...) services.
This in itself could be a pointer towards next steps of the IT outsourcers
a) They can become one of such SaaS providers- a number of product based companies came to be so because they learnt the domain while working for one specific client and then they structured that knowledge in the form of a product to give it to other clients. The IT outsourcers also can take the same route. But this time instead of making a product, they can sell the services hosted on the Cloud.
b) The can start providing man-power (and the delivery capability) to such SaaS providers.
2) A big chunk of all applications (whether made by some Saas provider or proprietary applications from companies themselves) would be hosted on the Cloud. But I am not clear why that would affect work of IT outsourcers. Biggest portion of their work comes from providing man-power and delivery capability to their clients, not from giving infrastructure services to them. So regardless of where the clients' code, data or application is hosted, the outsourcing of application maintenance and building would continue.
We will see how this actually turns out.
