Gartner predicts the death of the traditional sourcing model by 2015

James has more than a decade of experience as a tech journalist, writer and editor, and served as Editor in Chief of TechForge Media between 2017 and 2021. James was named as one of the top 20 UK technology influencers by Tyto, and has also been cited by Onalytica, Feedspot and Zsah as an influential cloud computing writer.

Gartner’s been gazing at its crystal ball again, and has forecast that service-led solutions – software as a service (SaaS), infrastructure as a service (IaaS), platform as a service (PaaS) and so forth – will displace more traditional sourcing methods by 2015.

The analyst house stresses that IT companies need to “bridge legacy offerings and new services”, again pointing a future to the cloud for service providers.

And cloud services appear to be growing at a much quicker rate than other elements of the IT services market. Hardware and software support will grow slowly compared to IaaS and BPaaS (business process as a service), which will grow 13.1% and 47.3% in 2013 respectively according to Gartner.

There are three recommendations Gartner has for service providers this year; stopping undifferentiated marketing messages, emphasising business value to ‘transform clients’ existing operations’; improving service delivery by reinventing the service portfolio; and determining whether a business model is based on scale or specialisation.

“Growth opportunities certainly exist for service providers with life cycle solutions in relation to the Nexus of Forces,” noted Eric Rocco, Gartner managing vice president. “However, this requires IT services providers to adapt to significant changes, including the growing influence of business leaders in technology investment decisions.”

The Nexus of Forces, which encompasses cloud, social, mobile and information, was introduced as a theory by Gartner back in August as the new paradigm for the future of IT.

This isn’t the first time the researchers have noticed the shifting sands of sourcing. As far back as 2011, Gartner was banging the drum of how low cost cloud IT solutions were “cannibalising” outsourcing as an industry.

The big discovery from the analyst house regarding cloud services last year was that the PaaS market would hit a billion dollars globally, starting to gain traction following the maturation of IaaS and SaaS.

Juan Carlos Soto of cloud provider Informatica noted this trend, telling CloudTech that “IaaS is projected to flatten out as hardware continues to commoditise, SaaS will continue to grow in a very healthy manner [while] PaaS is starting from the smallest base and is poised to grow fastest for the foreseeable years.”

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