The demise of the technology outsourcing market has been predicted by many IT pundits for years. In actuality, the reverse appears to be true, as a recent study by the industry analyst group, ISG, reveals a sector now generating over $100 billion in revenue each year. While this doesn’t show the growth of other emerging tech sectors, it is still a very relevant part of the overall IT industry.
Let’s take a closer look at some of the reasons behind the staying power of technology outsourcing. Leverage these insights to ensure your company is able to take them into account when formulating long-term strategies for its organizational growth.
Cloud-based Services transforming the Outsourcing Market
In the past, the outsourcing market grew in relevance primarily because of US-based companies “offshoring” their software development needs to specialized firms located in India and elsewhere. Local organizations simply wanted to save expenses related to software engineering and more inexpensive coding talent was available overseas. Over time, however, the outsourcing market began to change.
The rapid growth of Cloud-based services, typically identified by an “as-a-service” moniker, now makes up a larger portion of the outsourcing pie when compared to offshoring. Companies, once again hoping to save money, are leveraging software-as-a-service (SaaS), infrastructure-as-a-service (IaaS), and data-as-a-service (DaaS) among other similar offerings.
In addition to significant cost savings when compared to managing their own data centers and development teams, companies using Cloud-based services also benefit from being able to focus more on their core business operations instead of running an IT department. In short, letting the experts handle the technology side of the shop is good for business!
The Big Cloud Services Companies dominating Outsourcing
When looking at the big players in this emerging sector within outsourcing, there are many familiar names from the Cloud computing world. Amazon AWS, Microsoft Azure, and even Salesforce.com are seeing a rise in revenues due to companies outsourcing various technology functions to these Cloud service providers.
The ISG study noted the traditional outsourcing market suffered a two percent decline in revenues in the first half 2017. Over that same period, outsourcing to Cloud-based service providers grew by 36 percent, with IaaS offerings showing a 62 percent growth! Ultimately, this is yet another example of the growing relevance of the Cloud throughout the IT industry. Outsourcing will never be the same.
When you need additional insights from an ever-changing technology world, talk to the experts at Strategic IT Staffing. As one of the top high tech employment firms in the country, we can help your business achieve new levels of success. Schedule some time with us at your earliest convenience!