Changing Enterprise Perceptions Towards Cloud Computing and Outsourcing
Soaring costs of business operations, recession, a volatile dollar. All are causing companies to scour far and wide when cutting down on IT expenses. Outsourcing is the most popular strategy to counter rising operational costs, so says a. recent study by Savvis. Enterprises are embracing cultural shifts in outsourcing by focusing more on breakthrough technologies such as cloud.
According to the survey, nearly 60 percent of managers favor outsourcing critical business procedures to cloud computing-type models in search of long-term cost reductions. Since cloud-based services eliminate the need for expensive infrastructure in-house, organisations can reduce IT budgets considerably and reduce other associated costs such as power consumption and maintenance.
Nearly 60% of respondents believed that in-house infrastructure results in wastage of resources. Rather than focusing on infrastructure, IT companies are turning to key organizational prerequisites such as competitive agility, strong collaboration and increased productivity as well as efficiency of their operational models. Industry leaders believe that outsourcing combined with technologies such as cloud computing are the stepping stones to such success.
The Software as a Service model (SaaS) is a growing technological strategy that companies undertake to make huge savings on utility procedures carried out via proprietary software. This allows businesses to leverage the benefit of using software services without having to buy or install them. The costs are much lower than a buy-and-operate model.
On a similar note, infrastructure as a service (IaaS) models are also gaining attention. Here companies need not spend on exorbitant hardware storage for processing information, instead using the service via a shared interface between hardware vendor and business process. Remote access of complex hardware at lower cost comes courtesy of cloud computing.
Global organisations which currently outsource 25 percent of IT infrastructure will ramp up to over 40 percent. More than 50 percent of surveyed organisations admit that they have wasted money on buying infrastructure that could have easily been rented via a cloud service. However 56 percent of organizations (78 percent of Japanese organizations) are still satisfied with their in-house infrastructure management and are yet to shift to a cloud-based paradigm.
Surprisingly, 42 percent of organizations avoid outsourcing, citing lack of contractual obligation from outsourcing partners. However, in a sign of growing acceptance of the cloud, 85 percent are reportedly using some form of private or public cloud services for storage, Big Data and analytics.
Organizations are continually embracing new initiatives to ensure that outsourcing of managed services can bear riper fruit. The above survey shows that business enterprises are changing their focus from saving on IT budgets to enhancing core competencies. An avalanche of such strategic decisions awaits in the near future, with the cloud expected to benefit heavily.
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About the Guest Author:
Mandira Srivastava is a fulltime freelance writer who specializes in technology, health and fitness, politics, and financial writing. Equipped with degree of mass communication and having worked for both private and corporate clients, I have experience meeting a wide range of writing requirements and styles.
