Cloud to make an impact on outsourcing

Cloud computing is set for a bright future and will turn traditional outsourcing "upside down", but the latter is not likely to disappear for "many years yet."

Cloud computing is set for a bright future and will turn traditional outsourcing "upside down", but the latter is not likely to disappear for "many years yet", according to an industry analyst.

Gartner has predicted that by 2012, utility and cloud-based services will account for at least 50 percent of all new demand for managed IT infrastructure services. Jester explained: "The keyword is new demand...a major IT user [such as] a bank or government department is not going to throw out the outsourcing contract that it already has. Neither is it going to throw out its in-house systems."

That said, the analyst noted that the cloud or utility model will turn outsourcing "upside down" because unlike in the traditional model, where an outsourcer visits the customer IT environment to understand the infrastructure and negotiates the functions to manage, the cloud service provider lays out its capabilities and services from which the client has the option to pick and determine how much to buy.

For more on this story, read see Cloud turning outsourcing 'upside down' on ZDNet Asia.

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