Cloud computing business models 'will need to alter'

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The shift towards outsourced cloud services and changing customer expectations will require providers to radically modify their current outsourcing business models.

So says analyst firm IDC, which issued a report suggesting demand for access to new delivery models, such as the cloud and software-as-a-service, has become increasingly important for businesses.

With this trend, customers will expect higher levels of performance from providers and thus the relationship between the two sides will shift, IDC said.

In particular, “traditional” providers such as IBM, HP and Capgemini will need to drastically change their current outsourcing business models.

To be a successful provider in the outsourced cloud services market, competing companies will need to create “robust road maps” looking at how customers are planning to deploy services.

“Perhaps the greatest lesson of the Great Recession is the need for companies to be much more adaptable to changes in the market," said David Tapper, vice president for outsourcing and offshore services market research at IDC.

"This fundamental need is a major force driving considerable shifts in the outsourcing industry – shifts that not only involve provisioning more targeted and innovative solutions – but also involve the transformation of the outsourcing industry from a labour-centric model of service delivery to more asset-based services involving cloud-based outsourcing."

Talking about where businesses will head to for their cloud computing needs, Gartner analyst Rene Millman suggested many will initially look to the providers they have used for other IT services in the past.

“Many organisations will stay within their own levels of comfort," he told IT PRO. "They’ll probably try to get cloud services from the people they have been to before."

“If you’re happy with the relationship with your current suppliers it is probably going to make more sense to stick with them. But if [their services] are not fit for purpose, you’ll have to look further afield.”

Traditional software vendors working in the sphere would also need to stay relevant by developing apps for use across both the public and private cloud, Millman added.

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