Cloud computing spurring IT, application outsourcing evolution
As the enterprise continues to embrace mobility, decision-makers are turning to external environments to enhance operations and make solutions more widely available. According to a new report by Gartner, global IT outsourcing investments will exceed $251 billion in 2012, growing from slightly more than $246 billion in 2011.
Cloud computing is predicted to account for the fastest-growing segment of the outsourcing market. The research firm forecast spending on cloud services to reach $5 billion in 2012, representing nearly 50 percent growth from 2011 investments of $3.4 billion.
“Today, cloud compute services primarily provide automation of basic functions,” Gartner research director Gregor Petri said. “As next-generation business applications come to market and existing applications are migrated to use automated operations and monitoring, increased value in terms of service consistency, agility and personnel reduction will be delivered.”
How cloud application opportunities are changing IT
Application outsourcing, in particular, is becoming an increasingly common trend in the private sector as decision-makers recognize employee demand to leverage highly efficient solutions from around the world. The transition from premise-based tools to cloud applications is largely driven by the growing burdens associated with managing and maintaining legacy solutions, as well as the ongoing economic crisis that is negatively impacting IT budgets, Gartner noted.
These concerns have led more IT departments to deploy Software-as-a-Service applications, pushing application outsourcing spending to approximately $40.7 billion in 2012, up from $39.9 billion in 2011, Gartner noted.
“New applications will largely be packaged and/or SaaS-deployed in order to extend and modernize the portfolio in an incremental manner,” Gartner research director Bryan Britz said. “While custom applications will remain ‘core’ for many organizations, the trend in the next few years to SaaS enablement in the cloud will reflect in the growth of the [application outsourcing] outlook.”
A separate report by IDC confirmed the growing cloud application market, as the research firm forecast SaaS revenues to expand at a compound annual growth rate of more than 25 percent through 2014, at which time more than one-third of all enterprise solutions will be consumed via the cloud.
Furthermore, IDC expects approximately 85 percent of all net-new applications pushed to the market in 2014 will be composed and delivered through cloud computing environments.
As the cloud continues to evolve and mature, outsourcing solutions will become a more popular trend as decision-makers gain confidence in the technology.