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Can Cloud Shake Up the Outsourcing Delivery Model?

By Phil Fersht , Horses For Sources

Cloud computing has all the attributes and potential to support a global outsourcing environment with lower infrastructure costs, lower energy costs from eliminating hardware boxes, and much better scalability to provide computing resources to meet demand in an unpredictable global market.

My view is that we are in a global delivery continuum, where many organizations will originally evolve from crude business process environments (BPO) environments (a lot of lift and shift), explore Software as a Service (SaaS) delivery to optimize that environment, and ultimately dabble with SaaS apps that can be deployed in a cloud "plug-in" model. A flashy diagram will likely ensue, but that's the nuts-and-bolts of how this continuum will eventually play out.

Bottom line: those service providers that persist in a labor-arbitrage-only service model and ignore the benefits and cost-efficiencies of SaaS and cloud will get left behind...

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