There's little doubt that cloud computing is here to stay, but businesses have struggled to managed such IT services effectively. "In 2014, we expect clients and service providers to further define their strategic objectives for cloud services, applying consistent metrics to quantify their return on investment and navigate a rapidly evolving contracting environment," says Scott Feuless, principal consultant with ISG. "One key will be progress towards normalized measurement frameworks that enable meaningful comparisons of alternative solutions."
Ultimately, companies will be able to perform apples-to-apples comparisons of different cloud options, as well as comparisons of cloud vs. traditional solutions. "The result will be significant progress in reaping the benefits of cloud services, as buyers avoid the mistakes of early adopters," Fueless says. "Service providers will adjust their offerings to meet the needs of a more cautious and educated market."
6. Contracts Compel Inter-Provider Cooperation
Why can't they all just get along? This year, they'll be legally required to. "As organizations continue to implement a multi-sourcing, best-of-breed strategy customers need to find a way to force competitive service providers to work together to achieve common goals," says Helms of K&L Gates. In 2013, some outsourcing customers implemented outsourcing "cooperation agreements" that contractually obligated service providers to cooperate at an operational level. "I predict that 2014 will see an increased use of outsourcing cooperation agreements," Helms says.
7. A Lower Cost Consulting Model Emerges
This year, an increasing number of experienced IT outsourcing customers decided to forego the pricey third party consultants and set up their IT services deals on their own. Look for outsourcing consultants to adjust their approach in the year ahead. "In 2014, we'll start to see more consultants offer light-touch services for clients, often on annuity subscriptions, to service clients wanting ongoing relationships with less intense financial commitments," says Phil Fersht, CEO of outsourcing analyst firm HfS Research.
8. India Goes After Infrastructure
India Inc. made its reputation on application development and business process outsourcing. This year, they'll increase focus on infrastructure deals. "It would have been unheard of 10 years ago for an India-based provider to beat out an IBM, EDS, or CSC in an IT infrastructure deal in the United States or Europe," says Helms of K&L Gates. "I predict that 2014 will be the year where Indian-heritage providers become the biggest competitive threat for traditional U.S.-based infrastructure powerhouse providers."