From outsourcing to Cloud computing: evolution of IT services

Purpose – Many organizations are outsourcing their information technology (IT) related services to a third party vendor for quite some time. However, the IT services industry including outsourcing is going through rapid changes with the increasing adoption of Cloud computing. The purpose of this paper is to compare global IT outsourcing with Cloud computing along with the evolution of traditional IT services. Design/methodology/approach – Cloud computing is a model for provisioning and consuming IT capabilities on a need and pay by use basis. This helps in shifting the cost structure from capital expenditure to operating expenditure and also helps the IT systems to be more agile. This innovative model of acquiring IT related services has made organizations revisit their infrastructure and platform services strategy and optimize their IT spending while improving overall agility. This paper compares global IT outsourcing with Cloud computing along with the evolution of traditional IT services. Findings – The impact of Cloud computing on IT outsourcing is no doubt significant. Cloud computing represents a fundamental shift in how organizations pay for and access IT services. It has created new opportunities for IT services providers and the outsourcing vendors will have to modify their strategy to take advantage of this new computing paradigm. Practical implications – This research is relevant for practitioners as well as researchers in the field of IT outsourcing and Cloud computing. Originality/value – This research compares global outsourcing with Cloud computing along with the evolution of IT services. Very little research has been done in this nascent and important area.