Why cloud services will sell despite slowdowns in outsourcing and MSS growth

Within the last few months, I've read several news about slowdowns in the growth of the outsourcing business and particularly the MSS (Managed Security Services) business, at least compared to the high expectations raised in the years before. Does that mean that the cloud is dead before it really starts? I don't believe, for several reasons:

  1. There are different numbers regarding the status and grwoth of the MSS and outsourcing market. Some are much positiver than others - and it is no surprise that the negative ones are cited most (even the IT press more and more acts in the yellow press way...).
  2. In days of economic turmoil (and we are still in these days, despite the quick recovery of the bonus mentality in financial institutions), customers tend to first drop external services before they fire employees - that affects MSS.
  3. Outsourcing is sort of a "big beast" which is diffcult to tame. It takes a long preparation, it is inflexible. Overall, it needs to adopt to become more flexibile and easier to use. Cloud Computing with its granularity of services is an approach to address the shortcomings of outsourcing.
  4. A feedback I had from multiple CISOs regarding MSS is that the quality of service and the level of contol frequently is insufficient - thus it is about implementation and delivery of MSS, not the overall concept.
Two reasons why the Cloud (in my understanding of an approach for a flexible use of IT services with the ability to switch between and choose the best provider, internal or external - e.g. much more about service than about external things from the Internet) will be successful shortly explained:
  1. If you think about a matrix like shown below with two axis, Outsourcing is just sort of the specialized approach to the cloud. And from our expectations, the sweet spot for most providers will be around "community clouds", in the centre of this. That potential for industry clouds, community clouds, and point solutions isn't unveiled yet. Thus, there is much more in the cloud than is discussed today.
  2. The cloud is not new. It didn't just appear at the sky but grew over years. SaaS is out there for a while, service management as well. Not even to talk about outsourcing. The cloud is, from my perspective, just the result of an evolution from a tactical, opportunistic use of external services towards an strategic approach on how to best provide IT services (external vs. internal). We're at sort of the "break-even", to use an analogy.
[caption id="attachment_228" align="aligncenter" width="1024" caption="Cloud Matrix"]Cloud Matrix[/caption]

By the way: The biggest risk for the cloud is too much marketing. But that was the same with Client Server, the Internet, and many other things. None of them disappeared, but all big changes took years to become reality. The same is true for the cloud.

I appreciate your feedback on that! And see you at EIC 2010 and Cloud 10, both to be held in Munich, May 4th to 7th, 2010.



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