Outsourcing: a clear look at a cloudy subject

Analyst Opinion

“Wasn’t cloud just another name for outsourcing back then?” joked another guest in a recent briefing, as our host explained just how long ago he’d joined his company’s cloud division.

We all smiled, but therein lies a problem – still one of the biggest problems of all when it comes to cloud adoption and cloud strategy: Many people still have the wrong idea about cloud computing. Sure, it can be used as a form of outsourcing, but it isn’t ‘just a different way of outsourcing.’

And in any case, we all ought to know by now that outsourcing is not a panacea – it is not a solution for every problem. The number of organizations bringing outsourced IT back in-house is proof of that.

So if you use cloud as a cheap and easy way of outsourcing, your project is just as likely to fail – or quite possibly more likely to fail – as if you’d taken traditional outsourcing routes.

Beware outsourcing for the sake of change

Indeed, anyone reading this who’s been in IT for a good few years may well recognise the scenario: management – often a new manager, looking to shake things up – decides to outsource for ‘greater efficiency’. A little later it’s not going as planned, though. Costs have risen, performance and functionality aren’t meeting expectations, agility is lacking. And of course the manager responsible has long since moved on.

His or her successor crunches the numbers again and discovers that with modern technology, it’d be both cheaper and more responsive to business needs if brought back in-house. So it’s in-sourced, the new-new manager uses the ‘win’ to get a promotion or a better job elsewhere, and for a while all is well.

Until a new outsourcing partner – or more probably by now, a cloud or SaaS vendor – persuades manager no.3 that they can of course avoid the mistakes the old manager made in their outsourcing setup… And so on, around and around the loop.

So what’s the solution? How do you escape the loop? The first thing is to recognise cloud for what it is: a delivery model. Sure, you can outsource the infrastructure to a service provider, but not only is there a wide range of different types of provider available, you can also run your cloud platform in-house or in a hosting centre.

Hybrid IT may offer answers

The other thing is to seek what we might call infrastructure-neutrality, which typically means adopting a Hybrid IT strategy. This is the idea that you operate your various IT systems, public clouds, private clouds and so on as a single landscape – as far as possible, anyhow – and it’s something we’re seeing more and more of in our research.

Significant enabling technologies here include enterprise service catalogues and portals to add self-service and a common front-end, regardless of where an application actually resides, software-defined platforms such as HCI for versatility, and of course the ability to migrate workloads to wherever is the best fit at the time.

That might mean moving an on-site app to a public cloud, but it could equally well mean bringing a cloud app back on-site or migrating it to a different cloud provider – we’ve seen all of these turn up in recent research.

The result is, or should be, much more nuanced and flexible decisions around sourcing and platform choice. And of course, improved IT service delivery as a result.

Originally published on Freeform Dynamics’ Computer Weekly Blog – Write Side Up

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Bryan Betts is sadly no longing with us. He worked as an analyst at Freeform Dynamics between July 2016 and February 2024, when he tragically passed away following an unexpected illness. We are proud to continue to host Bryan’s work as a tribute to his great contribution to the IT industry.