Low-cost IT set for spike?

gallery

Low-cost IT could see a spike in uptake due to economic pressures, business uncertainty and the rise of the IT-as-a-service model, according to Gartner.

Companies could increasingly place their IT in the hands of services from emerging markets for cheaper offers, as economies in areas like Europe fail to get going, the analyst firm suggested.

The cost of IT will still drive business decisions in the coming years, said Claudio Da Rold, vice president and distinguished analyst at Gartner.

“As credit markets in the US and Europe remain challenging, end-user organisations are reducing costs by sourcing IT services from emerging countries and lower cost providers.”

Not only will cost cutting initiatives, restructuring and the shift toward offshore outsourcing accelerate, but growth in emerging countries will also speed up, Da Rold claimed.

In turn, this will widen the gap between high-growth areas, such as Brazil, Russia, India and China, as well as those found in the Asia/Pacific region, and stagnant economies like Europe and North America, he explained.

Furthermore, the gap between low and high-cost IT providers will become more pronounced, he claimed.

“This trend could drive a prolonged reduction in the unit cost of IT services, significantly affecting the IT services market by 2013,” Da Rold added.

The shift towards pay-per-use services, and the proliferation of advertising of the model, could also spur on greater uptake of low-cost IT.

“If the scenario of low-cost IT accelerates in the next few years, we foresee a growing number of delivery models that could cut the cost of IT by a third or more,” said Frank Ridder, research vice president at Gartner.

“This could lead to the emergence of viable low-cost IT providers.”

Email to a friend

Print this page