The outsourcing industry is growing thanks to the cloud

The IT outsourcing industry has experienced exceptional grow over the last three years due to the cloud services that they can offer their clients. Past trends and figures from previous studies indicate that cloud-based outsources are still growing due to the benefits and services they can provide companies.

Evidence of growth

Way back in 2017 Rightscale conduct a survey on a cloud-based computer. The findings indicated that 95% of the small and medium business polled had already converted to cloud technologies. The same survey also discovered that these companies were utilising multiple clouds to allow outsources precision focus on the tasks that where undertaking for the company and allowing for greater integration and business continuity. The system has become even more mature and cost-effective since the survey was conducted.

In its FutureScape Worldwide Cloud 2016 Predictions, IDC predicts that the public cloud will account for 31.68% of the IT infrastructure spending in 2020 and private cloud will take a 19.82%. So, by 2020 over 51.5% of the all IT spending will be focused on providing agile IT resources that can be easily accessed by IT outsourcers. This is startling when viewed with Forrester’s research that demonstrates that the cloud based industries are growing faster than predicted.

Computerweekly has published figures for growth the grow of cloud-based spending. IaaS contracts in third quarter 2017 increased to €3bn. This indicated that there was a 58% increase spending

SaaS was €900m and was on the same level as the previous year. By the fourth quarter of 2017, there was a 27% higher spending on cloud services. They predict that there will be stable growth of 20% or higher for the as-a-service market.

Statista has numerous statistics and graphs relating to the cloud computing all of which indicate steady and strong growth in IaaS, SaaS, and PaaS between now and 2020. This is supported by additional sources like KPMG’s research that predicts a PaaS growing from a 32% adoption rate in 2017 to a 58% adoption rate in 2020. Forrester predicts that SaaS will grow 22% (CAGR) between 2017 and 2020. Gartner predicts that IaaS will outpace the overall market growth by 13% by 2020. So all indications point to the continued growth of IT outsourcing to 2020 through these three services.

With the uncertainty of Brexit looming in the UK many companies are enacting risk reduction plans that seem them pushing automated services on PaaS and producing better integrated services for both IaaS and SaaS as access to a talent-pool may become harder. This will also drive growth through the cloud for outsourcing industries.

Reasons for this growth

Growth in this area is mainly due to the benefits that a business gains from outsourcing. These benefits include: –

Cost reduction

Companies can save a lot of expenditure by outsourcing to a cloud-based service. These saving include: –

• Not having to buy the system they are using
• No need to have inhouse experts to maintain systems
• Pay as you go or use models available
• Lower physical cost e.g electric, hardware, space

Networkworld report that IT outsourcing allows business to keep their IT budget nice and tight because they can employ less IT professionals on site. This is highly beneficial to the business as it frees up a great budget that can be allocated to operational costs.

Focus on Core

By outsourcing the IT aspects of a business, they can concentrate on their customers and the core aspects of their business more. This is fantastic for start-ups who do not have large numbers of staff and need to dedicate their resources.

Improved business collaboration

One of the key reason that business use IT Outsourcers is due to the high level of collaboration the format allows. Businesses can create a standardized system with their IT outsourcers that will allow them to have a great standard of business and offer continuity with the business itself.

One aspect of this improved collaboration is that firms get access to experts from a wider geographical range for a lower price. This means by outsourcing projects the company gets access to a wider range of talent that is dedicated to the area of interest the project is focusing on and increases the quality and likelihood for success of the project.

Conclusion

The prospect for continued growth in the IT outsourcing industry remains strong and substantial. Brexit is creating a drive and a greater need for IT outsourcing as companies prepare for worst-case-scenario outcomes to mitigate risks after a Brexit plan has been formalised.