Outsource services or cloud services?

CIOL Bureau
New Update

MUMBAI, INDIA: It's a classic scenario in today's times, where the outsourcing services have grown phenomenally well over the past three decades and the cloud computing concept or cloud-based services are evolving in recent years.


The outsourcing phenomenon, during all these years have lead to the so-called business process outsourcing (BPO) or information technology enabled services (ITeS) industry. And now, the cloud computing concept is also following the path of outsourcing phenomenon with growing number of cloud-based services providers world over.

Was it some kind of disruptive technology behind the outsourcing services growth that added a new dimension to a country like India in the field of IT? And is there the same kind of disruptive technology that is also pushing cloud services?

“Yes, there's technology but not disruptive technology. It's the economics of business that has determined, and will determine, the use of cloud services or outsourcing services in future,” says Michael Barnes, Forrester's vice president and principal analyst.


According to Barnes, outsourcing or cloud-based services are interconnected in some way or the other, as consumers (organizations) are interested in quality services with assured guarantee.

“Fundamentally, there's a change in services not in technology. For example, the BPO offers services irrespective of location, and the same way through cloud computing, you can access services from anywhere,” Barnes points out.

Interestingly, “It's a mistaken belief that BPO is good or cloud is good, because in both scenario, organizations want to make sure they get higher business efficiency or productivity, lower down-time, meet the workload demand and reduce the overall cost; getting efficient services is the key for organizations,” he says.


However, Barnes adds, organizations are not going to outsource everything or move everything on to the cloud platform. “But outsourcing service providers will need to match-up the efficiency or transparency of cloud providers, otherwise they will feel the margin pressures.”

Also read: Security cloud looms large over Cloud computing

Cloud computing is reshaping the business expectations through software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS) with web-based user access, along with models of pay per use, shareable resources, dynamic resource allocations and scalability.


According to Barnes, about 70-85 per cent organizations in Asia, including India, are largely focusing on private cloud compared to public cloud, which was happening two years back. Though the cloud adoption is growing, he views that there's a need of education and awareness about cloud computing in India.

“Besides security and data privacy concerns, India needs to have a good affordable broadband for providing cloud services. Without good connectivity, the cloud-based services will not be provided effectively and efficiently to consumers and it won't benefit them,” Barnes observes.

He concludes, “Earlier, we used to think of technology but today it is only about accessing services. And that's the priority for most organizations today.”