Is Cloud Just A Another Name For Outsourcing?

Every now and then I discuss the Cloud Computing topic at events and meetings with clients. Cloud is not something to be bought as a box of software, but a computational model that builds over time. The successful adoption of cloud is measured by the benefits that the business will achieve with its adoption.

One question that I always hear is that “Is Cloud Just A Another Name For Outsourcing?”. It is worth discussing this topic here. For me, cloud is another form of outsourcing, yes, but has many differences when compared to usual outsourcing model that we know. With cloud, you can “outsource” specific services and not just the “all-or-nothing” that we commonly see today. The current outsourcing model provides long-term contracts and contracted services in the cloud can be for short times and on-demand (a project or a momentary expansion of computing power) and payments for the use of resources (Pay-Per-Use ).

In fact, IT is increasingly moving toward being a set of external services. We use Google and salesforce.com or we talk about outsourcing of CRM or email … In my opinion this trend will accelerate to the point that will get a technology first and then outsource it in the future. The mental model will first think of outsourcing. The model will be IT-as-a-Service. This change over will affect users and IT outsourcing providers in the coming years, which will have to adapt the new model.

The current challenge is to separate “what is real” from “what is hype“. We still see a lot of information and oversimplification of cloud providers and potential users of these clouds. Cloud can take many facets. The services offered can be cloud infrastructure (IaaS), platform (PaaS) or software (SaaS).

Let’s make an analogy with the Internet. Internet as a whole is somewhat vague, but when subdivided into tangible things like electronic commerce, social media, e-mail, search engines, etc., becomes more tangible and easy to understand its value.

With cloud, it is the same thing. The use of services as IaaS could allow small and medium enterprises to spend technological resources that were previously unthinkable. A company may have 200 or 300 dedicated servers almost instantly and pay only for actual usage. No need to purchase them and install them physically in a data center itself. It will be impossible to install a commercial point of light for just getting signatures, telephony and IT in future business. Your IT infrastructure is basically tablets, smartphones and web browsers. Everything else may be in the clouds.

But the decision to adopt the model of cloud must not be purely tactical. Let us remember the e-commerce and Internet banking. Earlier having many doubts and fears, but it gradually spread and today it is unthinkable to live without them. These two technologies have created new businesses and many others have radically changed (changed internal processes, customer relationships, breadth of markets, etc.) and cloud is likely to have impacts as large or larger.

What we can do today is, we can examine the type of cloud more carefully, to separate the hype from reality, seek partners and suppliers who know what they’re talking about (and trust-inspiring) and start acting. We are, of course, at the beginning of the learning curve and certainly will not see specialists with 20 years experience in cloud!


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