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Utility computing will dominate outsourcing

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CIOL Bureau
New Update

BANGALORE: IT outsourcing is fast approaching the utility computing way from the current managed services, which is the order of the day in the present context. Although it has started in a small way this year, it is projected to experience a steep growth after 2008.



This was the outcome of glimpsing the future of IT outsourcing at the Global Outsourcing Forum 2002, organized by IDC India.



"The key characteristics of utility computing are that the service provider does not take control of IT staff, owned by provider with minimal customer control, complete sharing of infrastructure, delivered from a third party data center and the best part is pricing, you can pay as you use. With the outsourcing and managed services growing at a snail’s pace, fewer mega contracts are being signed and contracts are being more heavily scrutinized with downward pricing pressure," said IDC US, Program Manager, Networked Infrastructure Management Services, David Tapper.



The market is also witnessing a fundamental shift in the customer needs to maximize infrastructure utilization and leverage capabilities to improve quality of service with lower pricing. According to Tapper, the impact of utility computing will cannibalize the traditional IT services and system integration services, challenge current software distribution and pricing models, result in a handful of large players, require critical relationship with telecommunication providers and enable access to mid market. IBM, HP, AT&T, Microsoft, EDS and Sun Microsystem are leading pack of players ready to bring utility computing to the market.



Some of the recommendations for the present league of managed services provider include, focus on providing packaged application managed services offerings, partnering with ISVs to get in to application management space, pursue managed web hosting in key verticals such as financial and government and increase application focus on more business function and vertical applications. These are recommendations for short-term opportunities.



As part of the long term opportunities Tappers, informs, developing integrated partnerships with service providers and vendors such as IBM, HP and Sun Microsystems to support the slow emergence of IT utility services. He also recommends to enable large IT outsourcers access to mid-market through hosting infrastructure. Application development leads the pack of services that customers will outsource, followed by IT helpdesk, Infrastructure, application management and all of IT and specific IT functions in the last of the order.

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