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Cloud computing: After a record year, what lies ahead?

We are starting to see some companies overcome the fundamental differences between the objective of the IT provider and the customer Cloud computing is not a modern idea; the concept of computing-as-a-service has been around since the 1960s where companies rented time on a mainframe rather than having to buy one themselves. However, it has only been since the early 2000s that the term ‘cloud computing’ has been synonymous with an individual’s modern life – think about personal email services such as Hotmail and Gmail, social networking sites like Facebook and Twitter, and streaming services like Netflix and Spotify. For companies, however, while adoption was perhaps slower than for individuals, it is clear that cloud computing has been embraced as a key IT platform for the early 21st century and its rise is driving change in the outsourcing sector. – Thinkstock A changing world In 2018, the worldwide cloud computing infrastructure market ended on a record high, as spending grew 46 percent to nearly $23 billion in Q4 and the total outlay on cloud infrastructure exceeded $80 billion – up from $55 billion in 2017. This is big business and is causing the outsourcing trend of the past decade to change direction. The world’s largest IT firms used to solely manage all the IT needs of their customers, but today often no single technology vendor can effectively supply all of an organization’s requirements. Where this trend is really seen is in small and medium sized businesses. These types of organizations often fail to have the technical talent and skills within their own workforces and so are likely to target their IT spend towards agile IT resources. A key requirement for many such organizations is successful management and deployment of IT infrastructure, and the scaling of cloud-based infrastructure has been one of the fastest growing applications of cloud technology in 2018. As these types of organizations seek gains as part of their outsourcing strategies, not only does a cloud strategy deliver on cost efficiencies – cloud-based infrastructure allows the customer to scale its demand and only pay for the server load it needs – it also allows the customer to focus on the core aspects of its business and therefore dedicate what is likely to be a small number of staff to concentrate on its own customers and services. Larger organizations are also embracing cloud infrastructure with many turning to the global giants, such as Microsoft, Amazon and Google, to achieve their growth or business agility aspirations. Their reasons for doing so are often the same as those heard from small and medium sized businesses – flexibility is key, allowing cloud environments to be scaled up or down, and also expanded horizontally for new business opportunities. However, whilst their reasons for growth in cloud outsourcing are similar, there are some differences between larger organizations and smaller enterprises in the contract between the IT provider and the customer. Traditional contracting, where the customer is motivated to save on IT spend and […]

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