Cloud Strategy Essential for Offshore Service Providers
By 2015, the public cloud services market is predicted to exceed $180 billion, according to a Gartner report.Service providers that are slow, unable or unwilling to invest in the shift to the cloud will risk hampering offshore services revenue growth, according to a report from IT research firm Gartner. The study, "Will Cloud Services Make or Break Your Offshore Provider?", also noted the increased use of industrialized services will reduce the volume of traditional and customized services, and the impact on offshore providers would be counterbalanced by revenue from investments in cloud-based services. The proposed changes in the issuing of H-1B visas (U.S. work permits) could also have a significant effect on offshore service providers that depend heavily on these work visas. This could increase the need to both invest in local hires within the providers' major target markets and increase investments in cloud-based service offerings. "The initial resistance to public cloud has begun to subside and customers are beginning to realize its efficiencies as the solutions mature," Ian Marriott, research vice president at Gartner, said in a statement. "Cloud-based services will not replace offshore services, but will complement them. In addition, cloud services will not 'make or break' all offshore providers."
Gartner predicted continued strong growth in public cloud services, with user spending on public cloud services expected to grow 18 percent in 2013 to total $131 billion. By 2015, the public cloud services market is predicted to exceed $180 billion. In parallel, offshore service providers feel the increased pressure to adapt to changing market demands, and those that are unable to evolve from traditional delivery models could be displaced.