March 3, 2017

Cloud will disrupt the outsourcing model

From time to time I read a paragraph in an article that chimes precisely with my own views. Although expressed more elegantly and succinctly than my own, such missives are admittedly self-affirming. Here's a case in point from Forbes' Joe McKendrick on "10 Ways Cloud Computing Will Disrupt our Businesses in 2012"

Cloud will disrupt the outsourcing model.

"As more enterprises adopt service-oriented architecture principals and practices, outsourcing may become an easier, more manageable option... A more modularized form of outsourcing will take root because the growing standardization and “hot-swappability” of cloud services and components makes it easier to outsource pieces of the IT infrastructure. This may make outsourcing less of the onerous either/or business decision it has been, as chunks of applications or services can be outsourced or brought in house as the situation fits, with minimal disruption to IT operations and priorities. As a result, we’ll see more “micro-outsourcing” and less big-ticket-turn-the-whole-operation-over types of deals. Plus, cloud is lowering the barrier of entry for outsourcing providers, which will in turn multiply their numbers, heightening competition and lowering prices. If anything, this will energize the outsourcing market."

As a "micro-outsourcing” enterprise, we have certainly found our business to be enabled by cloud. This is both through purchase of "infrastructure as a service" on which we base our customer solutions, and the consumption of "software as a service" offerings of others which allow us to streamline our organisation. For the latter, "moduralized" services are highly desirable; we are persnickety about the applications we use. Such a model seems particularly well-suited to those with an open source pedigree (the clue is in the word 'service').

I would also like to highlight the role of industry bodies like the Pistoia Alliance in defining the precise information standards/functionality required by highly-vertical markets such as drug discovery. For such efforts, so vital in stimulating new and vibrant business models, we are indebted. I suggest such initiatives represent a new wave of open innovation.

Over the past few years we can attest to cloud having enabled new pay-per-use and open source business models. Whether the ensuing "micros" will, in 2012, disrupt the outsourcing model remains to be seen.

- William Spooner (CTO and Founder)

Topics: Big data technology, Bioinformatics, Cloud, open innovation, Open source, outsourcing, Pistoia Alliance