Gartner Banks on Platform as a Service in 2011

According to the Gartner’s latest statement, 2011 will be the year of Platform as a Service (PaaS). Gartner believes that all leading enterprise software vendors will introduce or strongly expand their PaaS service offerings and cloud-enabled application infrastructure products.

"By the end of 2011, the battle for leadership in PaaS and the key PaaS segments will engulf the software industry," said Yefim Natis, vice president and distinguished analyst at Gartner.

To make it plain, PaaS is a common reference to the layer of cloud technology architecture that contains all application infrastructure services, which are also known as "middleware" in other contexts. PaaS is the middle layer of the software stack "in the cloud". It is the technology that intermediates between the underlying system infrastructure (operating systems, networks, virtualization, storage, etc.) and overlaying application software.

Gartner also predicts that by 2015, most enterprises will have part of their run-the-business software functionally executing in the cloud, using PaaS services or technologies directly or indirectly.

Source: InformationWeek

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How to Choose the Right Cloud Computing Vendor

It has been noted by multiple advisory and analyst groups, that there's an awful lot of interest in the cloud area right now. It’s not surprising that business see benefits in the cloud services and cloud providers are in great demand. But can all companies quite deliver on the services they're promising? How to choose the right partner in the growing number of cloud providers crowding the market nowadays? You definitely want to do more than type the names of a few providers in a search engine. Selecting the right cloud services provider is a critical step to ensure that they can deliver on the promises offered by cloud computing.

Patrick Grey, president of the Prevoyance Group, and Charles King, principal analyst of Pund-IT, help to sort out the problem and give their tips and expert advice on the best way to seek a cloud computing vendor. Below are a couple of guidelines they suggest:

• Use metrics. Set benchmarks to measure good performance. Be realistic, though: 100 percent isn't always achievable, but maybe 99.9 percent is.

• Network. The best resources for choosing prospective vendors are other IT decision-makers and other vendors. "You would be well-advised to touch base with vendors you work with closely," says King. "You basically have to get out and work the networks and see what you can find."

• Make a test case. A good way to test a prospective vendor is to give them a non-essential part of your business first. And only then you can eventually move more critical pieces over.

• Consider data storage and security. Take a look at how a cloud provider's data storage, data security and security infrastructures work. How do these firms protect your data? What kind of security measures are in place?

• Use a service-level agreement. For critical, sophisticated or big projects, include a service-level agreement detailing which metrics need to be met and what penalties will ensue if they're not met.

Source: NewsChannel 5

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Cloud On Top of Outsourcing Demand in 2011

According to a recent survey conducted by the global sourcing advisory firm EquaTerra, cloud computing will largely impact the IT services marketplace in 2011. Cloud based services will dominate the market and will attract more and more contracts from growing Small to Medium Business.

Alongside growth and importance of cloud computing, other key findings of the survey include the waning demand for outsourcing in its traditional, legacy form with a focus on generic, horizontal IT and the bulk of mega-deals. IT outsourcing will continue to evolve and diversify in a more fragmented manner. Established outsourcing models are going to be replaced by more flexible ones with the following characteristics:

• Smaller in scale and scope
• Larger efforts and ambitions, pursued more incrementally
• Greater focus on more strategic activities and specific vertical industry services
• Greater focus on functional areas such as legal, research and development, and real estate and facilities management
• Greater standardization of offerings and platforms with a nascent but growing focus on cloud computing delivery models
• More realistic and tighter business cases

The business and IT service market has matured over the past five years and the outsourcing buyers and service providers with inveterate mindsets and operating models will find it challenging and even threatening to survive amid the current market changes.

Source: EquaTerra

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Eastern Europe to Dominate the IT / ICT Outsourcing Space

Eastern Europe, already a popular and trusted nearshore location for continental Europe outsourced functions, is sweepingly ramping up as a hotspot for global players luring more and more software outsourcing contracts. Just consider the latest activity in the region: Wipro opened its development center in Budapest (in December 2010) and chemical producer Celenase has recently contracted IBM to run its financial shared services center in Hungary.

So what are the driving forces that make the Eastern European region so attractive? A shift in economic patterns, rise in tertiary occupations, improved FDI and government initiatives (lowered tax rates) to promote trade, and improvement of national fiscals are the underlying factors for increased ICT and are the major drivers for IT services and software development. Eastern Europe also ranks high in terms of work ethics and cultural sensitivity, adding to the region’s attractiveness as a base for outsourced activity.

And of course not to forget about the cost advantage. According to the industry experts, the cost advantage offered by Central and Eastern European firms to nearshore and offshore buyers is comparable with that offered by China.

Summing up, it is now highly likely that Eastern Europe will move out from being an ‘emerging destination’ to a ‘key destination’ for IT outsourcing activity. The region is expected to experience a new surge of demand from Western Europe and at the same time gain a ‘hard to ignore space’ on the world arena in the coming years.

Source: SourcingNotes

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Ukraine Reports Highly Profitable Year in IT Exports

Ukraine's Vice Prime Minister Serhiy Tyhypko announced that the country’s exports of computer software reached 1 billion USD in 2010. Ukraine – the world's fifth biggest IT services exporter – doubles its IT services exports every year, making IT the fastest growing export-oriented sector of the country.

"The steel export totals 2.8 billion USD, the export of agricultural products is up at 9.5 billion USD, and chemical products export reached 3.5 billion USD. And the export of software products is worth 1 billion USD. Moreover, the inflow doubles each year," said the Vice Prime Minister of Ukraine.

In terms of IT services and software engineering, Ukraine primarily places emphasis on its deep talent pool. With 14,000 IT specialists graduating from Ukrainian universities each year, the country holds the fourth position in the world in the number of IT specialists, following the USA, India, and Russia. On top of that, the experts recognize both quantitative and qualitative potential of the Ukrainian specialists.

By the way, there has recently appeared a monument to IT specialists in the Eastern Ukrainian city of Kharkiv. The monument is placed outside of the Kharkiv National Radioelectronics University and depicts a young IT student holding an opened laptop. He is deep in his thoughts, perhaps thinking of creating a software program which could eclipse Microsoft.

Source: PR Newswire

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European Trends in ITO for 2011 (Part II)

As promised in the previous post, here comes the continuation on the development tendencies of the European ITO market in 2011. Judging from the perspective of ITO services providers, the following trends and changes are anticipated:

It is expected that an increased demand to adopt outsourced IT services will come from the SME segment. This will force service providers to anticipate smaller and, thus, less profitable deals. To ensure more significant profits in the long term, IT providers will have to improve their adding-value service offering, cloud capabilities and modify current engagement models to help SMEs grow their business and, as a result, to benefit from their clients' growth.

Secondly, innovative outsourcing engagement models are anticipated to hit the mainstream. Outsourcing entire product or application development processes, the companies will demand from their potential partners transparent cost structures, no hidden agenda, options to easily scale up or down in compliance with the current business situation, etc., which makes service providers diversify/innovate their engagement offerings.

And the third trend reveals itself in the breakdown of the client-silo approach. As businesses aim to learn more best practices by sharing knowledge with their peers across different industries, IT providers will be challenged to transform their client-silo mindsets and encourage collaboration between clients from various industry domains.

All in all, 2011 promises a prosperous but at the same time challenging year for European ITO with focus on agility, processes optimization, transparency of transactions and payments, innovation, and cloud. But we’re looking with optimism into the new 2011!

Source: EzineMark

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European Trends in ITO for 2011 (Part I)

Well, another year is here with its new perspectives, new hopes, new aspirations, as well as new plans and strategies. At the very start of the year we bring to your notice IT Sourcing Europe’s outlook on the European ITO market and future development trends and relations between Western European ITO services buyers and Eastern European ITO services providers.

Judging from the perspective of ITO services buyers, the following trends and changes are anticipated in 2011:

One of the most vivid tendencies – which came from 2010 with over 9 billion Euro in contract value and is anticipated to further increase in 2011 – is the increased demand for outsourced IT services from the public sector. The demand for cost-effective outsourcing opportunities in this sector is primarily explained due to recent turmoil in such countries as Ireland and Greece as well as economic uncertainties in other EU member states.

Secondly, there is traced a shift from mere cost saving to access to qualified and lower-cost IT resources. Already in the previous year Western Europe faced a significant shortage in skills and resources in the branch of software development; Eastern Europe, on the contrary, showed a significant increase in IT workforce led by Romania with a 12.33% growth in the number of IT specialists and followed by Ukraine with a 9.51% growth.

Closely connected with the above comes the third trend: nearshoring will hit the mainstream. Of almost 2,000 non-outsourcing companies polled in the survey, more than 22% plan to transfer their IT/software development nearshore versus only 11% of those who plan to outsource offshore.

And last but not least, service integration will help achieve innovation. In 2011, more Western European IT leaders are expected to realize the importance of integrating the outsourced project management, orchestration and delivery, thus gaining full control of their sourced projects.

In the second part of the post we’ll dwell on the trends and changes which are anticipated in 2011 judging from the perspective of ITO services providers.

Source: EzineMark

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