Outlook for outsourcing looking increasingly ‘cloudy’

According to new studies by IDC, European enterprises will spend $8.2 billion on Cloud professional services in 2015, an increase from only $560m in 2010, but the demand for traditional services will still be there

New outsourcing contracts are increasingly including Cloud services, and as much as 25% of Cloud professional services will be delivered as part of outsourcing contracts, but the rise is also attributed to a migration away from existing, legacy ICT systems which is leading to co-existence demands that in turn are a services industry opportunity. This means that the traditional services providers need to get their Cloud services strategies in place soon.

Meanwhile a second IDC study predicts spending on public IT Cloud services will expand at a compound annual growth rate (CAGR) of 27.6 percent from $21.5 billion in 2010 to $72.9 billion in 2015.
 
In 2015, public Cloud services will account for 46 percent of net new growth in overall IT spending in five key product categories – applications, application development and deployment, systems infrastructure software, basic storage, and servers, according to IDC.
 
Software-oriented Cloud services (SaaS) will account for roughly three quarters of all spending on public Cloud IT services throughout the forecast. This includes all three software-oriented Cloud categories, not just applications. Spending on hardware-oriented Cloud services (servers and storage) will be largely driven by SaaS providers building out their infrastructure.
 
Frank Gens, senior vice president and chief analyst at IDC, said: “Cloud services are interconnected and with accelerated by other disruptive technologies including mobile devices, wireless networks, big data analytics and social networking.

“Together these technologies are merging into the industry’s third major platform for long-term growth. As during the mainframe and PC eras the new platform promises to radically expand the users and uses of information technology leading to a wide and entirely new variety of intelligent industry solutions ... the winners of the cloud platform wars will likely to the new power brokers of the IT industry.”