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Outsourcing News : Article

IT Infrastructure Outsourcing Suppliers Employing the Traditional Model Will See Steadily Declining

Infrastructure outsourcing suppliers that employ the traditional model will face steadily declining revenues as early as 2009, according to a new study by the Everest Research Institute. This is the result of companies continuing to sign shorter-term IT outsourcing contracts that retain ownership of their assets but allow remote infrastructure support.

Although the traditional Infrastructure Outsourcing (IO) revenue decline trend is predicted to be slow, suppliers must develop new strategies to grow their businesses, according to Growth of Infrastructure Management Outsourcing (IMO). The report is one of a four-report series that provides a comprehensive examination of the IO market trends and dynamics.

We will continue to see steady growth of IT infrastructure outsourcing, but the predictable continued cannibalization of the traditional model in favor of IMO solutions will compel suppliers to decide which IO model is most appropriate for their businesses, said Ross Tisnovsky, Vice President of the Institutes ITO Research Group. Traditional suppliers can slow down the adoption of IMO by expanding their traditional model offerings to take advantage of offshore labor arbitrage or compete by adopting key aspects of the IMO model that might jeopardize prospects of pure-plays but allow the IMO market to expand faster.

Read entire article on Business Wire

Posted: Tuesday, March 13, 2007

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